LatinFinance - November/December 2014 - 34

Continued from page 32

Transferring profits
As the banks draw in customers formerly
left out of the banking system, they find
themselves competing with businesses
that have long catered to cash-only customers. In Colombia, chief among these
are bill-pay operators, such as Via Baloto,
and domestic remittance agencies, such as
Giros y Finanzas.
"They have created a number of services
that compete [with us] directly," says Viviana Renjifo, Giros y Finanzas' marketing
manager. Nevertheless, Giros y Finanzas,
which is also partner of Western Union, has
entered a limited partnership with Daviplata, allowing users to send and receive
VIVIANA RENJIFO
GIROS Y FINANZAS

"THEY HAVE CREATED
A NUMBER OF
SERVICES THAT
COMPETE [WITH US]
DIRECTLY. WE WILL
ALL HAVE TO WORK IN
THE DIGITAL WORLD"
international remittances through their
phones.
Initially, the new services were successful primarily among retirees and beneficiaries of government welfare programs, who
began to distribute funds digitally, Renjifo
says. But they have since expanded their
appeal to a broader audience. "I believe this
will grow a lot," she adds.
For the time being, Giros y Finanzas' services sufficiently differ in fees and branchbased approach to avoid a direct clash with
banks, Renjifo says. But as phone-to-phone
transfers and mobile wallets become
more and more common, that is bound to
change, she admits. Her company is therefore looking into how to best expand in the
digital market.
"We will all have to work in the digital
Continued on page 35

34 L ATINFINA NCE.COM - November/December 2014

Increased competition and regulatory oversight
are creating a tough environment for retail money
transfer operators. By Raúl Gallegos

New entrants

T

raditional international
money transfer businesses in Latin America, and indeed globally, are facing difficult
times. This may seem surprising for an industry set to handle more than $435 billion
in global remittances this year, according to
World Bank estimates.
Technology has increased competition
and threatened the margins of the more
OPEN AND SHUT: Many large banks have left
the money transfer business, while niche
operators are increasing

established players. Tougher financial regulation has also become a headache for some
in the money transfer business, particularly
the bigger banks.
A host of independent upstarts are offering web and phone-based services to move
money from the US to Latin America and
other regions, and some have deep pockets:
even Facebook has made moves over the
past year to get into the money transfer
business.
Another competitor gained the backing
of a much larger institution in October:
Latin America's biggest microfinance
group, Compartamos, agreed to buy Pagos
Intermex, which had a 5.7% market share in
remittances from the US to Mexico in 2013.
The growth and size of the remittance
business explains, in part, why new competitors want to break in. The World Bank
reckons global remittances will increase 5%
this year. In Latin America alone, remittances topped $61.3 billion last year, and they
are set to grow between 5% and 7% by the
end of 2014, according to Inter-American
Development Bank estimates.
But while new firms come in, big US
banks have been reducing their presence in
remittances over the
past year. Transnetwork Corporation,
a Latin Americafocused remittance
processing firm,
bought Citigroup's
Central American
remittance business,
Citi Remesas, for an
undisclosed sum in
October.
Tighter regulatory disclosure rules
meant to discourage
money laundering
have made remit©REUTERS

local chief executive Viviana Varas.
Meanwhile, in Peru, the local banking
association is launching a mobile money
platform for customers of all banks, with
Swedish mobile phone firm Ericsson.

TRANSACTION
BANKING
REMITTANCES


http://www.LATINFINANCE.COM

LatinFinance - November/December 2014

Table of Contents for the Digital Edition of LatinFinance - November/December 2014

Contents
LatinFinance - November/December 2014 - Cover1
LatinFinance - November/December 2014 - Cover2
LatinFinance - November/December 2014 - Contents
LatinFinance - November/December 2014 - 2
LatinFinance - November/December 2014 - 3
LatinFinance - November/December 2014 - 4
LatinFinance - November/December 2014 - 5
LatinFinance - November/December 2014 - 6
LatinFinance - November/December 2014 - 7
LatinFinance - November/December 2014 - 8
LatinFinance - November/December 2014 - 9
LatinFinance - November/December 2014 - 10
LatinFinance - November/December 2014 - 11
LatinFinance - November/December 2014 - 12
LatinFinance - November/December 2014 - 13
LatinFinance - November/December 2014 - 14
LatinFinance - November/December 2014 - 15
LatinFinance - November/December 2014 - 16
LatinFinance - November/December 2014 - 17
LatinFinance - November/December 2014 - 18
LatinFinance - November/December 2014 - 19
LatinFinance - November/December 2014 - 20
LatinFinance - November/December 2014 - 21
LatinFinance - November/December 2014 - 22
LatinFinance - November/December 2014 - 23
LatinFinance - November/December 2014 - 24
LatinFinance - November/December 2014 - 25
LatinFinance - November/December 2014 - 26
LatinFinance - November/December 2014 - 27
LatinFinance - November/December 2014 - 28
LatinFinance - November/December 2014 - 29
LatinFinance - November/December 2014 - 30
LatinFinance - November/December 2014 - 31
LatinFinance - November/December 2014 - 32
LatinFinance - November/December 2014 - 33
LatinFinance - November/December 2014 - 34
LatinFinance - November/December 2014 - 35
LatinFinance - November/December 2014 - 36
LatinFinance - November/December 2014 - 37
LatinFinance - November/December 2014 - 38
LatinFinance - November/December 2014 - 39
LatinFinance - November/December 2014 - 40
LatinFinance - November/December 2014 - 41
LatinFinance - November/December 2014 - 42
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LatinFinance - November/December 2014 - 44
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LatinFinance - November/December 2014 - 46
LatinFinance - November/December 2014 - 47
LatinFinance - November/December 2014 - 48
LatinFinance - November/December 2014 - 49
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LatinFinance - November/December 2014 - 54
LatinFinance - November/December 2014 - 55
LatinFinance - November/December 2014 - 56
LatinFinance - November/December 2014 - 57
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LatinFinance - November/December 2014 - 59
LatinFinance - November/December 2014 - 60
LatinFinance - November/December 2014 - Cover3
LatinFinance - November/December 2014 - Cover4
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