Capturing an Elusive Market
Payments 2010
April 28, 2010
Meet the speakers
• Ernest Gregg, Treasurer, Ria Financial
• Wendy Miller, Global Payments Manager, BNY
Mellon
• Steve Wojciechowicz, Senior Business Manager,
SWIFT
3
Agenda
• Market overview
• Ria Financial Service
• SWIFT Workers’ Remittances
• BNY Mellon
4
Market overview
Customer Reach:
Estimated 300 million migrants worldwide.
• 66% send money home regularly
• Receive side family groups average 4 to 5 people
• International migrants 200 million
• Annual transactions 1 to 1.5 billion
• Average transaction value +/- USD 300
A remittance is a cross-border, person-to-person
payment of relatively low value.
Considerations for Providers
Compliance
• Working within the confines of your compliance team
• Each bank must adhere to its existing compliance for new customers and transactions
Technology
• Work / partner with an
organization that can provide the global low-value payment
infrastructure
• Support an easy to use front-end solution for capturing payment activity
Education
• Educating staff – tellers and CSRs
Ethnic marketing focus
• How to market to the different communities
5
Build a Global Remittance Offering
Options for service delivery
• Consider: • Service • Price & time
transparency • Consider: • Scalability • Consider: • Cost • Efficiency • Consider: • Commercial autonomy Partner with a MTO franchise Build a proprietary network Use open correspondent banking arrangements Build a bilateral service with a correspondent 6
7
Family Remittances
Place Subsidiary Logo Here
Proprietary Information
The contents of this document are confidential and may contain trade secrets. This document may not be distributed and its contents may not be disclosed, in whole or in part, without the express written consent of Euronet Worldwide, Inc. This document is an unpublished work protected under the copyright laws of the United States of America and other countries.
Euronet Worldwide
Business Segments and Countries of Operation
Euronet Countries of Operation
EFT & SOFTWARE
CORPORATE
PREPAID TRANSFERMONEY
Processing more than one billion transactions annually for customers
in 42 countries. Place Subsidiary
Logo Here
•Family Remittances (P2P) •Bill Payments
•Prepaid Debit Cards •Check Cashing •Money Orders •Currency Exchange •Other Prepaid Products
Money Transfer Segment
Unbanked/Underbanked Prefers cash
Exchange rate sensitive Community centric
First generation immigrant Multiple products
P2P Money
Remittances Profile of Customer
CASH ACCOUNT CARD HOME DELIVERY
CASH
CARD
ACCOUNT
Value Chain
Person – Immigrant - Cash - Check - Agent - Store Money Remittance - RIA - MG - WU - Banks/Swift - Visa/MC - Banks - FX House - Retailers - Cash - Account Person – Non Immigrant - Cash - Check - Card - Account - Store - Online Remittance - Domestic - P2B - RIA - PayPal - MG - Banks - WU - Banks/Swift - Visa/MC - Banks Check Casher - Retailers - Cash - AccountCustomer Settlement POS Product Player Settlement POP Beneficiary
Business AccountBank Online eCommerce - B2B
- Bank Banks/Swift
- Visa/MC Bank Account
Card • • • • •
Account
•
•
•
•
•
•
•
Check
•
•
•
Cash
•
•
•
Western Union Money Gram RIA Bank Online Paypal Mobile
Conclusion
Place Subsidiary Logo Here
How vertically integrated do you want to be?
Find your place in the space and focus
The business and the customer define the technology
If you understand your place strategic alliances make sense
Different value propositions
CustomersPartners
12
Objectives
• time transparency
• price transparency
• ease of use
Deliver a robust end-customer value
proposition
Bring scalability to bilateral bank services
Support any type of retail payment product
Remain commercially and brand neutral
Workers’ Remittances
A
business
and
technical
framework for bilateral clearing and
settlement of person-to-person payments
Business framework
Technical framework
Business Contract Market Practices Reference Data Messaging Standards Messaging Services
=> Commercial flexibility
=> Interoperability, efficiency, scalability
SWIFT Workers’ Remittances – what is it?
An interbank platform for the bilateral clearing and settlement of cross-border, person-to-person, payments Market Practice Rulebook Messaging Standards Reference Data Messaging Services
Business and Operational Rules and Guidelines
ISO 20022 XML payments clearing & settlement messages, specified for P2P payments
Counterparty data: central repository of participant, agent, and point-of-service in a common format
FileAct 6.1 Store & Forward
Business terms and conditions remain bilaterally agreed between counterparties
Implementation
SWIFTNet
E-banking Call-desk
teller
customer ATM Mobile
Front Office services
Back Office services
Network services
FileAct Messages ISO 20022 Workflow Market practices Transaction initiation Workers’ Remittances 16Information Security Identification: Confidential
Remit Worldwide
•Worker Remittance Payments through Banking Channels
•Presented by Wendy Miller
Opportunity for Banks
Acquisition: New business and customer loyalty growth,
remittances are value-added services that attract new
customers.
Retention: Offer existing customers a service usually offered
by another provider.
Fee income: Transaction revenue continues to grow in
importance to banks
Opportunity for Banks
Migrants make up a significant percentage
of the US population, and growing
Immigrants are the fastest growing
segment of the population and retail banking.
Multi-cultural retail client base
Many segments are active senders
International payments is a core product
to attract customers
Immigrant Day Laborer
Full Time Immigrant Employee Fully Assimilated Immigrant Immigrant Married to U.S. National Upwardly Mobile Individuals
Approximately 90% of outgoing remittances originates outside of banking channels.
Opportunity for Corporates
How it works
Opportunity to offer payroll deduction (similar to term
insurance, gym memberships etc.)
Why
Meet the needs of a diverse workforce
Convenience
Value add benefit to employees
Sending Party BNY Mellon Receiving Banks
(Originator) (Operator) (Distributor)
Electronic Deposit Cash Pick Up
R e m i t W o r l d w i de
R e m i t W o r l d w i de
BNY Mellon’s Remit Worldwide
A white-label solution, a global network
Case Study – Apple Bank
50 branches located throughout the New York Metropolitan area
NYC approximately 36% of population foreign born
Top 5 nations of origin are: Dominican Republic, China, Jamaica,
Mexico, Ecuador.
Needed: Solution for deposit and revenue growth, considered
remittances as possibility
Easy to implement solution with little development
Global reach to target ethnic communities with new service
Compliance friendly solution
Recognized leader in space to partner with in launching successful
program
Apple Bank’s Requirements:
Case Study – Apple Bank
Remit Worldwide web-based implementation, no
IT development
Global network of partners in 16 key remittance
destinations
Easy tools for compliance reporting
BNY Mellon provided turn key marketing
materials to announce new service
Training branches, staff, admin, compliance
Solution: Apple Bank launched ‘AppleGram’ January 2009.
Robust Receiving Bank network
Leverage correspondent banking relationships in all key markets – we
navigate the world for you
Leverage the best within each country
Technology platform -- Easily integrated with bank’s existing channels
Built in compliance tools
Private label solution allows for retail bank’s branding
BNY Mellon is exclusively a wholesale bank, no retail customers
Pursuing opportunities to expand how we service global client needs
