Cross-border payments: a race to the bottom

 Gwera Kiwana photo
Gwera Kiwana Senior Ops Analyst
3min read

Customer-facing global remittance companies encounter a lot of threats. To compete and remain relevant, they will need to build sustainable moats.

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Sending money around the world has been a big business over the last few decades. The space was dominated by a few large players for far too long (Western Union, anyone?). The fintech revolution saw the introduction of digital challengers racing to offer low cost cross-border transfer services. Over time, the cost of making a transfer has significantly gone down.

A couple of factors have led to those incumbents like Western Union struggling to grow revenue. Digitisation of services has significantly driven down the cost to compete, which has resulted in a more crowded market. When the market is crowded, companies operate on razor-thin margins and differentiation at face value is difficult. It seems a fair enough statement to make, then, that cross-border payments companies need to build moats, or die.

cross-border payments companies need to build moats, or die.

The best defences out there

Successful remittance companies have adopted a defensive strategy. The main moats I’ve seen from successful companies include:

  1. Neobanks

  2. Crypto (hear me out!)

  3. Ecosystems

  4. Community


Neobank adoption exploded in the UK and across Europe throughout the 2010s. Birthing the likes of Monzo, N26 and Revolut, this trend has found its way to the Global South. The stand-out example is Nubank.

The remittance-service-provider-to-neobank-pipeline is real! Wise (FKA TransferWise) started off as a challenger remittance company that’s slowly built their neobank moat to great effect. They’ve slowly started adding features that look a lot like a neobank, which is in turn supercharging their growth and increasing their customer lifetime value. Here’s how they’ve managed to look, smell and act like a bank:

🌍 Multi-currency borderless accounts with your own bank details - which seem like multiple current accounts 👀

💳 The borderless account comes with a debit card to enable easy spending

🆕 Rebranding from Transferwise to Wise feels like they want to distance themselves from being a ‘transfers’ company. Also, all the coolest neobanks have short names nowadays anyway!


As I said before, hear me out on this one!

There's a blank slate when it comes to crypto in most markets. We’ve seen a lot of crypto-first companies like Coinbase bring crypto trading into the mainstream. Chipper Cash started off as a no-fee cross-border remittance company and have grown their customer base to 4 million, across Africa, the UK and US. They have a bitcoin exchange product that’s garnered a lot of popularity.

🏆 Chipper Cash’s first mover advantage puts them in the unique position to build now and ask for forgiveness later in the form of collaborative approach with regulators. Their most recent funding will likely be focusing a lot of energy on policy and engagement with regulators.

💰 Their most recent funding also came from FTX who are famous for popularising cryptocurrency trading in the US. So SBF seems to be making a confident bet on Chipper Cash as the vehicle that’ll accelerate the future of crypto in Africa.


Telcos' closed ecosystems mean market dominance in mobile money (MTN, Orange, Safaricom, etc). Despite sluggish attempts to innovate they still have an important moat - their agent networks which serve customers.

Wave stand out as a remittance company that’s heavily invested in their ability to put down deep roots in the markets they exist in.

🦸🏾‍♂ Wave have shown they're not afraid to cross that moat, and create their own with a growing network of >4k agents. They’ve shown tenacity to not only build an agent network, but be digitally native in building out their customer experience layer and operational infrastructure - then proving that it works. And they're just getting started.

🤔 The founders’ earlier venture Sendwave allowed them to cut their teeth in the remittance game and quickly realised that it was (and still is) a race to the bottom. Being acquired by WorldRemit in 2020 gave them a deeper pool of resources to strengthen the Europe/Africa corridor and focus on Wave’s mobile money play.


With stiff competition in the remittance space, community could be the foundation of loyalty to a company on its journey to growth or through a pivot. Building a community is hard, but when it works, the payoff is incredible! According to First Round’s 2019 State of Startups report: ‘nearly 80% of founders reported building a community of users as important to their business, with 28% describing it as their moat and critical to their success.’ Told ya.

community could be the foundation of loyalty to a company on its journey to growth or through a pivot.

I’ve only ever seen one clear example of a remittance company with a strong community element to it: Tanzanian YC backed startup Nala.

💖 Most fintechs’ Twitter mentions are filled with complaints, customer support requests and straight up scammers. Nala’s Twitter feed reads like a love letter to Nala from customers, fans and fintech nerds alike. Other founders in the space have even commented on the Nala ability to build community.

🗺️ Nala have been intentional in how they’ve brought their community along for the journey. They have made their product roadmap public. The roadmap hints at a few interesting moats like multi-currency accounts.

My Unfiltered Opinion:

When it comes to cross-border remittances, delivering a good customer experience is simply not enough anymore. I’ll say it before so I’ll say it again: evolve by building a moat or die.