Money transfer FinTech Zepz is reportedly looking to add to its business portfolio.
The company, which owns remittances firms WorldRemit and Sendwave, is looking for merger and acquisition targets in a bid to capture a greater portion of the global payments market, CEO Mark Lenhard said in an interview with CNBC published Thursday (June 15). Zepz is also planning the debut of its first digital wallet.
“We want to be a core financial hub for a very particular segment,” he told CNBC, with a specific emphasis on migrant communities sending money home.
PYMNTS has contacted Zepz for comment but has not yet received a reply.
Zepz’s interest in M&A is something of a surprise, as the company recently embarked on cost-cutting measures that included laying off 26% of its workforce last month, per the report.
The move was necessary as combining WorldRemit and Sendwave under one parent organization had duplicated some roles, the report stated.
Zepz’s efforts are happening at a time when digital disruption has reshaped the global remittance market, through which hundreds of billions of dollars move across borders each year.
Estimates from late last year by the World Bank showed remittances growing by 5% in 2022, to $626 billion. And because the World Bank also estimates that 1.4 billion adults remain unbanked, the movement of money needs to transcend bank accounts.
While some long-established players have been shifting to digital channels — a shift hastened by the pandemic — they’re still facing competition from digital-only upstarts.
Remittances tend to be a more resilient business than most during tough economic times, as migrants continually send money back home.
All the same, Zepz Chief Financial Officer Robert Mitchell told PYMNTS in a November interview that doesn’t mean the company can take its eye off competitors or price-conscious customers who routinely seek cheaper or faster alternatives.
“For us as a company, we’re always leaning into the product to make sure the user experience is fully enhanced and making sure we’re addressing any sources of customer churn,” he said at the time.