How COVID-19 is Influencing Partnerships in the Payments Landscape
The COVID-19 pandemic is dramatically accelerating a worldwide trend toward cashless payments. At the local level, more and more businesses are encouraging electronic payments to avoid surface contact with the virus on cash and coins. Internationally, both individuals and businesses are seeking new ways to transfer money in a faster and more cost-effective way.
To handle the demand, financial institutions and companies need a partner that can assist in providing real-time, secure payments. Globally, Thunes has proven to be a strong candidate. With more than 400 international partnerships and the largest partner network in emerging markets, the company’s customers include Western Union, Ria Money Transfer, Remitly, WorldRemit and other leading financial institutions.
In particular, Thunes’ global reach is acutely positioned to handle remittances from migrant workers to their home country, which is critical to sustaining local communities around the world. Thunes has a deep understanding of currency controls in its partner countries, enabling efficient handling of cross-border money orders.
According to the International Monetary Fund, as of 2018, remittance flows to vulnerable economies reached $350 billion, ”surpassing foreign direct investment, portfolio investment, and foreign aid as the single most important source of income from abroad.” This means that remittances sent back by migrants are a crucial source of external financing.
“The global pandemic has exposed the vulnerabilities of the global remittances system,” said Gilbert F Houngbo, president of the UN’s International Fund for Agriculture Development, leading up to the International Day of Family Remittances on June 16. As digitisation rate picks up, along with an increased adoption of mobile banking and mobile money services in emerging markets, new payment platforms look set to expand the reach of global remittances, while lowering costs for those who benefit from it.
The Right Network
“COVID-19 has had an impact on cross-border payments but our performance in Q2 and market trends leave us optimistic about achieving further growth for the rest of the year,” shared Peter De Caluwe, CEO of Thunes, in August this year. “We have seen an increase in transactions via mobile wallets and banks in countries such as Mexico, Pakistan and the Philippines, which are traditionally dominated by cash transactions. Movement restrictions imposed by countries to mitigate the spread of COVID-19 has led to the shift from cash pick-up transfer to digital payments.”
Thunes’ latest remittance partner is TrueMoney, a leading Southeast Asian fintech company. This partnership enables TrueMoney users to receive remittances from anywhere in the world via Thunes’ global partner network, which operates in more than 100 countries and in 60 currencies. Prior to this partnership with Thunes, TrueMoney’s cross-border remittance service was only available in selected markets via its TrueMoney mobile wallet, or through TrueMoney cash pick-up agents. This partnership now enables all sending partners of Thunes to have access to Truemoney’s agent network.
Companies like TrueMoney benefit from this broader network, allowing them - and their customers - to receive and send remittances from all over the world. Instead of forging partnerships with various platforms across different regions, Thunes’ large network of partners creates a one-stop-shop for cross-border payments such as remittance.
Faster, Simpler, and More Secure Platform
For families living in low- or middle-income countries (LIMC), money sent by their migrant loved ones is a lifeline. As a result, speed is important. While a bank can take up to a few days to transfer money, with added costs including processing fees and varying conversion rates, platforms such as Thunes can get it done in a more time- and cost-effective manner.
For companies looking to form a remittance partnership, security is also essential. The rise in digital payments during COVID-19 has led to an increase in payment fraud; with millions of job losses and a bleak economic outlook, the pandemic crisis has proven to be fertile ground for fraudulent behaviour. For Thunes, securing their platform starts at the onboarding process for new clients. The company thoroughly examines a client’s framework to determine the risk level.
Simplicity is also a factor that determines a strong partnership. Companies want a partner that removes the complexity of cross-border payments, allowing them to focus on their business. In every country, the level of financial inclusion differs from a more formal banking system to a majority unbanked population. Thunes connects more than 100 countries under a single API that complies with all regulatory and capital control requirements. This simplicity also extends to the client onboarding journey - one that is often viewed as lengthy and time-consuming. To address this, Thunes recently rolled out a new dedicated digital portal for onboarding, giving clients a quick, easy and secured onboarding journey, allowing clients to join Thunes’ network in a matter of days and quickly establish payments corridors anywhere in the world.
Working with vastly different banks, technologies, internal and international payment operators, merchants as well as the end consumer is highly complex. But Thunes’ resources are committed to keeping pace with the demand on payment systems as fintech continues to evolve, and the need for inclusive growth in the global economy increases.