Remitly, a fintech firm backed by the Amazon founder Jeff Bezos has recently raised $135m for expansion of its global cross-border payments business, suggesting that there are still significant opportunities in the global remittance market. Not surprising then that Facebook wants to get in on the action.
This is consistent with reports from the World Bank that remittances to low-and middle-income countries reached a record high in 2018. It estimated that officially recorded annual remittance flows to low and middle-income countries reached $529 billion in 2018, an increase of 9.6 percent over the previous record high of $483 billion in 2017.
Facebook said remittances were a core focus of the Libra project, hoping that its digital currency would make it easier for immigrants and the underbanked to send money internationally without incurring big fees from traditional banks.
Commentators however are suggesting that modern network technology and aspiring fintechs in the payments game are challenging the notion that the payments industry should and can be treated as something separate to banking. Could we eventually see more regulation in the payments industry as payments fintechs seek to dominate the market?
Remitly plans to use the $135m of new equity for growth, including geographic expansion. Users can currently send money from 16 countries, and receive money in 44. Remitly does not have a set target for new markets, but Mr Oppenheimer said there were significant expansion opportunities in a rapidly-digitising global remittances market that the World Bank puts at around $690bn a year.