International Money Transfer: The more I read about business innovation case studies, I am fascinated by the approaches taken by different companies to solving common problems. In this instance, the premise is quite simple – I need to transfer money to someone internationally. In this instance I am referring to a personal transfer as opposed to business.
Problem statement:
Lets look at the business innovation through the real value transfer-wise aims to provide the customer:
- International fund transfer is expensive.
- Exchange rate provided by banks are lesser than the current exchange rate checked on google
- Time taken for transfer takes anywhere between 3-5 working days
- The UI or transfer mechanism followed by banks is not entirely customer centric.
Value proposition: International Money Transfer Innovation
Following from the above problem statement, the value proposition is quite simple. It is resolving all the problems highlighted above. Personally having used transfer-wise, I find it really simple and easy.
In fact, the exchange rate I receive is usually the current value. Sometimes, I am quite shocked that money reaches in less than a day. For me, the transfer-wise experience has transformed international money transfer into a simple exchange.
I quite like their log in screen and the APIs which connect to the online bank portals eliminating some typing errors about recipient, etc.
How does it work?
The international money transfer innovation proposed by Transfer wise is better explained in the video below:
The base of the business model is in peer to peer transfer. Comparable of peer to peer model are Air BnB, etc. Although the operations are entirely different, the technology enables transfer almost as if it was done locally. So the actual costs borne in the process are quite limited.
With businesses like these picking up, I am very excited about the international money transfer market. Competition usually brings out more innovation. In this scenario, I am hoping that more banks would focus on providing a better customer service to match if not reduce the cost of international transfers.
I am sure these things take time, but the beauty of business model innovation lies in the opportunity for more players to provide better solutions.