With a $500 billion market opportunity and the proliferation of mobile devices among unbanked or underbanked consumers globally, the money transfer space is primed and ready for disruption.
For BillMo, that disruptive remittance model revolves around one thing — delivering value.
It’s no longer enough to just get money from the sender to the receiver, especially when it comes to consumers who lack access to traditional financial services or have avoided using them for various reasons.
While mobile devices have helped to deliver services efficiently and economically to these consumers, the mobile wallet play still tends to be surrounded by a lot of hype without providing the value needed to drive a shift in consumer behavior from using a card-based system to a mobile tap-and-go system.
While BillMo does operate in the mobile wallet space — the U.S.-based company supports a low-cost money transfer app that enables individuals in the U.S. to send money to family and friends in Mexico via smartphones — don’t get it confused with mobile payment methods like Apple Pay and Android Pay.
Steve LaBella, founder and CEO of BillMo, recently explained to PYMNTS that the app delivers quite a bit of value to consumers who typically pay high fees for money transfers by enabling transfers for as low as $0.99 per transaction.
“The reason that it works is really quite simple: we deliver value to the customer,” LaBella said.
Putting Value in the Equation
With BillMo, recipients must register with the mobile app, and, once that happens, they have the option to cash-out the funds they have just received or they can access a number of services, such as bill pay, purchasing prepaid airtime and even shopping at participating retailers, all directly through the mobile app.
“We’re really delivering value to the sender and the recipient at the same time and that’s really what I think has helped us with the adoption of our product,” LaBella noted, adding that BillMo has seen the usage of its value-added services outpace the usage of the cash-out option.
What BillMo is really driving is a necessary change in consumer behavior.
Traditionally, remittances have remained a cash-to-cash or direct-to-cash business, but by enabling a digital transfer of funds that can be monetized through additional services, BillMo is sitting in a unique position to help incentivize the digitally driven behavior it would like to see, LaBella explained.
For example, BillMo may offer a user the ability to have 20 pesos added to their mobile wallet if they shop at a participating store. In that way, LaBella said, BillMo is able to educate the user on the service while also rewarding them instantly for giving it a try.
“It’s all about the value that we can provide to the consumers at the time … they’re transacting,” he said.
Expansion at the Ready
Today, BillMo operates U.S. to Mexico money transfers, but LaBella confirmed the next step is to expand its product and services to other countries in Latin America as well.
For now, the company is focused on increased distribution, which will enable it to sign and work with more retailers and different processing networks in all of the countries in which it will look to operate.
LaBella said that by the end of 2017, BillMo expects to be available in more than 10,000 retailer locations across Mexico, a significant jump from the couple thousand stores it current operates in.
“It’s a little bit of chicken-or-egg situation — we’ve got the customer base and that’s growing, but in order to drive the behaviors we want, we also need some level of distribution,” he noted. “We are trying to do both of those at the same time.”
While BillMo is excited about expanding geographically, LaBella also said the company is equally excited about growing the number of financial services it will be able to offer no matter what country it’s serving.
Some industry observers continue to voice concerns that the Trump administration and its impact on geopolitics could end up shrinking the opportunity available, but LaBella said it’s nearly impossible at this point to do any significant retrenchment of the type of migrant activity that has fueled the massive global remittances business for so long.
“There certainly could be an impact if … extremes [are] taken around who is allowed in this country and who is not, but from our perspective, we’re at the very front end of that tail,” he said. “We literally move millions of dollars a month, and there’s billions of dollars a month that gets moved overall, so we have lots of room to grow.”