The Battle For Control Of International Remittances Heats Up

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REMITTANCE WARS - MONEYGRAM, WESTERN UNION VS. WAL-MART, FACEBOOK: MoneyGram and Western Union, giants of the $594 billion international remittances business, face challenges from new competitors, who say the international and domestic money transfer sector has bloated fees. We wrote about a new generation of peer-to-peer money transfer apps in our last report. Many of these, like Venmo, are popular with younger consumers. Facebook is seeking European regulatory approval for an electronic money license that would allow it to participate in peer-to-peer international remittances, according to the Financial Times. Wal-Mart announced the launch of its own domestic money-transfer service, despite an existing contract with MoneyGram. Pam Patsley, CEO of Dallas-based MoneyGram, tells the Dallas Morning News that the Wal-Mart contract drives up to 9% of the company's revenue. Elizabeth McQuerry, at payments consultancy Glenbrook, says retail banks should also offer competing online peer-to-peer money transfer services, and many already are.

Meanwhile, the legacy players are scrambling to retain customers and promote their brands among younger consumers online and on social media. Yesterday, MoneyGram announced a new partnership with Facebook app PicomoPay, allowing the app's users to transfer funds for pickup at MoneyGram agent locations around the world. Western Union has gone on a marketing blitz, as Mobile Marketer reports. In partnership with 20th Century Fox, the Colorado-based company has launched a mobile game tie-in with "Rio 2," an animated adventure film from the makers of "Ice Age." The game, which can be seen on mobile browsers at wu.com/rio2, offers a 50% discount on money transfers after successful completion of three levels, which we beat handily in a few scant minutes. But it will take more than cartoon tie-ins to fend off disruption in the money transfer market.

BRITISH SKITTISH ON MOBILE PAYMENTS SECURITY: Paym, the peer-to-peer mobile payments joint venture created by a consortium of U.K. banks, will go live tomorrow, but consumers are skeptical. Forty-seven percent of 2,051 account holders surveyed by market researcher Consumer Intelligence say they will definitely not use the service, a quarter say they will use the service and 28% aren't sure. Seventy-one percent of those who said they would not use the service cited security concerns as the reason. The survey results highlight how security fears are still an important hurdle for mobile payments adoption. E-commerce faced a similar problem in the late 1990s, so chances are good that consumer sentiment might shift.

U.S. BANK ADDS REAL-TIME PEER-TO-PEER PAYMENTS: U.S. Bank announced that its customers can now send real-time peer-to-peer payments using their mobile phones on Fiserv's Popmoney platform, according to a press release. Additionally, the service can now be used to request payments - a feature already offered on similar platforms such as Square Cash. To learn more about P2P payment services and why so many institutions are beginning to offer them check out our recent report.

FLINT MOBILE'S ANDROID UPGRADE: Flint Mobile will today announce upgrades to its Android app. The upgrades to the point-of-sale app - which uses the camera phone to scan credit cards - allow merchants to send invoices through the app, a feature designed to appeal to merchants who operate outside of a storefront environment. Our recent in-depth interview with Flint CEO Greg Goldfarb is available exclusively to BI Intelligence subscribers.

QUOTE OF THE DAY: In a blog post on Stratechery, Ben Thompson identifies why payments innovation is more likely to come from outside the U.S.: "The problem with building a new payment system or service in the U.S. is that credit cards, all things considered, aren't that bad. The upside to the new payment systems relative to credit cards is much less than the benefits of credit cards relative to cash ... That is why the most interesting places to think about when it comes to new payment systems are countries with low credit card penetration."

People On The Move:

Rory Innes has joined Salamanca group, which provides merchant banking and operational risk management services, as the head of cyber security. Innes previously worked in sales and marketing at Dell SecureWorks.

George Hogan is moving to an international senior vice president role at corporate payments provider WEX. Hogan has held a number of positions at WEX since he joined the company in 2007, including CIO.

Have your own career move to share? Email kgriffith@businessinsider.com

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