Telcos’ Impact on Money Transfer Market

Right now there are many unbanked, low income people who transfer money using informal networks having high transaction cost and are susceptible to fraud and theft. This parallel economy is starting to turn heads of major telecom companies throughout the world to counter their shrinking profit rates and slow subscriber rates by stepping into money transfer industries.

These telecom companies enable the users to send or receive money online as easily as sending an sms. This offers a more secure and fast solution for the underbanked sector of the developing economies while also diversifying telecom business services.

The services provided by telecom companies have increased competition in the money transfer sector. Leading to better services, faster transactions and cheaper transfer rates.

Extending these services to the emerging countries, mainly in Asia and Africa, gives the people a number of benefits like speed and security of the transaction.  It also eliminates the need to travel long distances to the nearest banks of money transfer offices as majority of the population of these areas reside in rural areas.

The increased usage of mobile money also causes increases ARPU of the telecom company. These greater revenues help the companies to improve their services. The revenue from mobile money services complements the company’s communications revenues. This is a parallel service that can be very easily merged with a Telco company’s already established business and mobile network.


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