This article was written by Robin Arnfield and first appeared on Electronic Payments International on 13th February 2018 here.

Global payments business TransferToinitially just provided mobile network operators (MNOs) with infrastructure to
send international mobile airtime top-ups to emerging markets. It has since
expanded into the fast-expanding international mobile payments and remittances
market, Robin Arnfield reports.

Founded in 2005, TransferTo has its
headquarters in Singapore, and is regulated by the Financial Conduct Authority
(FCA) in the UK. Its investors include Ingenico.

TransferTo (www.transfer-to.com) operates a
cross-border mobile payments network, enabling real-time international mobile
airtime top-ups and money transfers to and from emerging markets.

Partners

TransferTo’s network interconnects
and provides a global compliance framework to over 1,500 partners. These
include banks, MNOs, digital financial services firms, mobile money operators,
mobile wallet providers, NGOs, and international e-commerce merchants.

“TransferTo processes mobile money
transfer and airtime top-up services in over 135 countries, all via a single
API connection and commercial relationship,” Nicolas Vonthron, TransferTo’s EVP Payments, Europe, and Africa.
“It enables its partners to process digital payments globally.”

Mobile airtime top-ups

“Our initial business involved
enabling the transfer of mobile airtime, and this still remains an important
focus for us,” says Vonthron. “We have partnerships with over 550 MNOs for
mobile airtime, mainly in emerging markets. Around 95% of the population in
emerging countries have prepaid mobile phones, and this number is increasing.”

“In addition to the growth of mobile
prepaid voice plans, we see growth in prepaid mobile data in emerging markets
due to the popularity of smartphones,” Vonthron says. “You can top up a data
bundle, and this is on the rise due to the smartphone boom and the rise of
Internet connectivity in emerging markets. By 2020, over 50% of the population
in emerging markets are predicted to own smartphones.”

TransferTo’s network allows its
partners to offer their consumers the ability to send airtime and mobile data
credits to friends and family back home. “Airtime and data can be sent not just
through the customer’s MNO but also via money transfer operators or any type of
mobile app, Web interface, or point-of-sale kiosk,” says Vonthron.

“In some countries, US$3-$5 is worth
a month of mobile airtime communication,” says Vonthron. “In developing
markets, mobile data is very attractive, as it allows people to access the
Internet, use WhatsApp, watch YouTube, or do voice-over-Internet calls. Mobile
data top-up is a big market for us.”

The incentive payments market is
also important for TransferTo. “A lot of companies are using us to send
incentives to customers consisting of mobile airtime top-ups worth under $1,”
says Vonthron. “For example, they do this to reward people for taking surveys,
for paying bills on time, or for downloading an app.”

However, it isn’t possible to send
airtime to mobile wallets. “Mobile airtime transfers and money transfers serve
a different purpose, go via different networks, and have totally different
regulatory frameworks,” says Vonthron. “Mobile airtime is a commodity, while
money transfer and mobile money services are regulated by the Central Banks.
TransferTo has a subsidiary which is licensed by the FCA as an authorised
payment institution to provide fully-compliant money transfer services.”

Money Transfers

TransferTo entered the global money
transfer market in 2016 and now offers real-time transfers in over 100
currencies, using over 200 payment partners.

In October 2017, TransferTo said
that over 6.3 million transactions were processed across its money transfer
network in a six-month period, representing an eightfold increase in revenue
between April and September 2017 for the business line. The majority of
transactions came from the Middle East, South-East Asia, Europe, and
intra-Africa, it noted in a news release.

“Europe is more of a sending region
for us than a receiving region,” says Vonthron. “Having said that, we see
Eastern Europe as an emerging region. We do a lot of business handling intra-regional
transfers, for example between neighbouring African and neighbouring Latin
American countries or from Africa to Asia for the Indian diaspora.
South-to-South transfers are a major focus for us.”

“The global money transfer business
is experiencing a major transformation from the traditional brick-and-mortar
model – where people physically went to stores to send and receive cash – to
digital money transfers, especially through apps and mobile phones” says
Vonthron.

“We mostly process mobile
wallet-to-wallet and P2P money transfers, enabling money transfer and mobile
money providers to connect to our network and send money to multiple payout
networks.

“We work closely with banks in our
key markets, and are also connecting new non-bank digital money providers like
M-Pesa and Ecocash in Africa. All these partnerships mean we are able to
connect over 2 billion people, who have previously been unbanked, into our
money transfer network and give them access to this new type of digital
financial service.”

Vonthron says that TransferTo is
also able to work with major card networks such as MasterCard. “It’s possible
to send mobile money from a payment card via our gateway to a mobile wallet
held by someone who is ‘newly banked’,” he says. “In addition, we can enable
people to send money to prepaid cards, for example for gig economy payments.” More
recently, TransferTo has started to facilitate mass salary and commission
payouts for companies to their contractors and employees.

TransferTo recently announced that
it is working with Grab, a mobile ride-hailing and payments platform in
South-East Asia, to enable real-time daily earnings payouts for Grab
drivers using their GrabPay account. TransferTo’s network enables Grab’s base
of over 1.8m drivers across South-East Asia to link their GrabPay mobile
account directly to their personal bank account or opt for a cash pick-up
option as a means of collecting their salary.

“These mass payouts are mostly for
low-value amounts” says Vonthron. “Transfer limits depends on each country and
regulation. For example, in Kenya, the maximum transfer amount is $700, and in
South Asia the limit is $150-$200 in some countries.

“We are working with Central Banks
to get them to increase the money transfer limits and to have a risk-based
approach to digital money transfers, as we are really trying to reduce cash and
informal systems. We do a lot of transfers with and between banks, as they tend
to have higher transfer limits than mobile money operators due to the fact that
Central Banks impose higher compliance standards on banks.”

“Actually, a lot of our partners see
us as a real-time SWIFT interoperability system between mobile accounts for
emerging markets, and this has a really positive impact on their services and
eventually on their customers. Recently, we were awarded a grant from UNCDF
(United Nations Capital Development Fund) to help improve access to digital
financial services and reduce the gender gap by leveraging remittances as a
channel to improve women’s economic empowerment.”