FIs and payment processors have a major opportunity to collaborate with FinTech pioneers to serve the growing market for mobile social media money transfers.
Mobile person-to-person (P2P) transfers are increasingly replacing cash and checks for informal transactions, particularly among millennials. Convenient, easy-to-use mobile P2P apps such as Venmo and Google Wallet enable users to send money to each other without visiting ATMs to get cash or banks to cash checks.
What will really drive the mobile P2P market will be ability for consumers to chat via social media apps and at the same time embed mobile money transfers in their messages.
The FinTech sector is attracting considerable interest from venture capitalist firms. Global investment in FinTech ventures tripled from $4.05 billion in 2013 to $12.2 billion in 2014, with Europe being the fastest growing region in the world, according to an Accenture report. Europe saw a 215 percent increase to $1.48 billion in 2014, Accenture says.
The P2P money transfer market has proved a key target for investors. In July 2015, Singapore-based social media money transfer firm Fastacash raised $15 million in Series B funding from international investors, taking its total funding to $23.5 million.
Other digital money transfer firms which have raised significant amount of investments include London-based WorldRemit which as of February 2016 had so far received nearly $200 million, U.K.-based Azimo which raised $20 million in June 2015 and integrates with Facebook for money transfers, and London-based TransferWise which raised $58 million in January 2015.