The pandemic, and the international trail of economic chaos it has wrought, has thrown the growing importance and relevance of readily available digital remittance products into stark relief worldwide, Volopa Director Jay Wissema told Karen Webster, as both senders and receivers have been forced by necessity to change their habits.
Pre-pandemic, particularly on the receiver side of the equation, consumers had their favored pick-up location, stores and other remittance outposts where they’d long since established both a relationship with the shopkeeper and a habit around traveling to that specific spot to pick up their payment. But then the pandemic happened, he noted, and shut down not only the physical locations for their cash disbursements, but physical commerce around them nearly entirely.
“It forced customers to look for ways to spend money online and on mobile, which has significantly increased the opportunity for providers such as [Volopa’s newly launched remittance product] Oya,” Wissema said. “And we are seeing that as we look at digital remitters reporting double-digit growth during this period.”
It’s an exciting time and an opportunity for firms positioned to profit from the opportunity, which is what pushed Volopa to make its entrance into the market earlier this year with Oya, a new remittance corridor between the U.K. and Nigeria. And, he noted, Oya’s recent launch is just a beginning; the goal is to grow that single corridor into a worldwide remittance business better suited to meet a market’s custom needs.
“Oya is the first step in our plan to expand the business into other markets,” he said. “We have made a big commitment to the sector as a whole and growing in the sector. We have active plans to expand into other sender [and] receiver markets.”
Why Nigeria Was The Right Launching Pad
Volopa’s focus wasn’t remittances when the company launched in 2011. Instead, the focus was in currency exchange and money transfer.
Wissema said that grew to be a very extensive business, and Volopa currently sends money to 180 countries encompassing 40 currencies. Nigeria’s naira currency was the 40th to join the platform, creating an opportunity for Volopa to expand the company’s offerings into the world of remittances.
“Remittances were not a market we had touched but felt that it was a natural extension for us and [the] platform, which is very, very flexible,” Wissema said. “We saw we have both the expertise and the capabilities to do this. And we felt particularly with the Nigerian sector — because it is such a large sector, such a large corridor out of the U.K. with more than $4 billion being remitted — it is a significant market and we should try and approach it in a different way.”
That different way, he noted, entailed building something exclusively developed for the Nigerian community, micro-targeted to them. Although a developing economy, Nigeria has a rather advanced banking system with a good deal of participation from citizens.
Wissema said Oya offers the “basic hygiene points'' of faster, cheaper services via a host of “rational benefits.” These include a guaranteed rate, near-instant delivery of funds to consumer accounts, low transfer fees and the ability for customers to track their transaction every step of the way. Those are run with back-end transaction monitoring and data encryption so that remittances aren’t just swift and seamless, they’re also safe.
“If you look at both our pricing and speed, we are delivering an exceptional service, and are at least arguably the fastest way to send money to Nigeria,” Wissema said.
But more important than perhaps ensuring that, what Volopa is seeing in the remittance market is that consumers are developing an emotional connection to Oya. Wissema said customers respond well to a product developed directly for them and their needs.
Nigeria is a good starting point for Volopa in the remittance market given its size, the sophistication of its customer base and its banking system’s development level, Wissema said. And he noted that within the Nigerian market itself, Volopa sees a lot of opportunities to develop even further. For example, making it possible to send remittances into the market from any EU member state is an upcoming goal.
But remittances are a big and desirable space, and many of the biggest financial services names are currently expanding their efforts globally, making it a competitive market. Being a single-corridor player isn’t a permanently sustainable business plan no matter how well Volopa develops that single corridor.
“This is a very competitive space, and we do have to expand to other geographies very, very quickly,” Wissema said. “We’re having conversations related to the U.S. market, and we're certainly thinking about other receiver markets within Africa, some of which we can enter based on our current relationship [and] some of which will require new relationships. … But the truth is, we will have to grow aggressively in order to build sufficient scale.”
But Wissema noted that from where Volopa sits, the incredible growth in digital remittances this year means the opportunity to capture that scale is there. All it takes is players willing to dig deep into building the local relationships that are needed to get that growth flywheel really spinning.