Dozens of new startups running websites and apps now provide cheaper, easier ways to transfer money abroad. Remittance senders paid banks approximately 8 percent of the $583 billion that people sent across borders last year. On the other hand, WorldRemit and other digital competitors take only 1.3 percent or less to send up to $1,000. The startups only operate digitally, buy currency in bulk to get volume discounts, and offer better exchange rates. To speed transactions—and maximize fee volume—most of the startups automate ID verification and check against money laundering.
WorldRemit and its rival Azimo market mainly to blue-collar migrants who typically send money home in increments of $1,000 or less, while another startup, CurrencyFair, targets professionals who send larger amounts. The startups are concentrated in Europe because of the ease of complying with regulations. Although most of the transfer startups aren't profitable, investors are interested in their expanding market share, which is currently very small compared to traditional providers such as Western Union.