Wise is trying to make it cheaper and easier
Extracted from the Business Insider
- Wise, formerly TransferWise, is expanding into Fiji as it looks to overhaul the Pacific money market.
- With remittances making up 5% of the local economy, Australia country manager Tristan Dakin said it is hoping to shake up the market and make transfers cheaper, faster, and more transparent.
- To overcome a lack of banking infrastructure, Dakin revealed Fijians will be able to open up digital wallets using a phone number and enable instant transfers.
Currency exchange and transfer platform Wise is expanding into the Pacific as it eyes a severely underserved remittance market.
Rebranding from Transferwise earlier this year, the $6.6 billion fintech announced on Thursday it is pushing its services into Fiji to fill a gaping hole left by traditional foreign exchange providers.
“We listen to our customer feedback and they’ve made it clear that what they want is to be able to send money back to Fiji,” Wise Australia country manager Tristan Dakin told Business Insider Australia.
“Not only does does remittance make up about 5% of GDP in Fiji, there was just a massive lack of options for people sending money there. There’s quite a big Fijian population in Australia and New Zealand and the options that they had for sending money home was super limited, really expensive, and very slow.”
While much smaller than other new markets Wise is pushing into, like India and China, the Pacific is perhaps one of the most neglected regions in the world when it comes to the fast-growing remittance market.
Yet there are limited options available despite the fact these countries rely heavily on it. Hundreds of millions of dollars are sent home each year, with remittances representing up to 40% of Tonga’s economy, and potentially even more as international tourism recedes.
A major part of that has been a lack of competition in a market, with Pacific families slugged an average of 9% to transfer funds, with the cut often hidden in lower exchange rates.
Wise says that by offering Fijians a better rate, it can beat rivals like Western Union by as much as 100 Fijian dollars on transfers of $5,000.
It’s overcoming a lack of banking infrastructure meanwhile by using Vodafone mobile wallets instead.
“There has been a lack of options in Fiji which is one part of the puzzle but what we’re doing is rolling out a [product] which only requires someone to have an active phone number,” Dakin said.
“It means they can now receive money instantly via our [payment] rails and pay bills and buy things with QR code which makes everything a lot easier.”
At a time when demand for international travel remains muted, Dakin said there’s clearly growing demand to send money home now more than ever.
While Wise doesn’t discuss future markets, he also suggests the same kind of product could be replicated and reproduced in other Pacific Islands soon.
“Even if people don’t necessarily end up using Wise’s services, if it has a positive kick on effect to other services they use, if it makes them cheaper and faster and better for them, that’s still a win in our book.