Table of Contents

Global Consumer Money Transfer Market - The briefing covers the various instruments used for international money transfers and the factors driving the consumer market. It profiles players, sizes the current market and provides a four-year forecast.

Product Code: BFFS0268

Publication Date: 11-May-2004

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Overview

Introduction

The Global Consumer Money Transfer Market has been growing steadily throughout the years. However, an upsurge in labor migration has further impacted on the market and opened the door to new opportunities. New providers are entering the market and new money transfer services are emerging. In what direction will the market move in the next four years? This briefing provides the answers.

Scope

· This briefing focuses on person-to-person international money transfer transactions.

· It concentrates on formal money transfer instruments.

· It looks at inter-regional transfers only. Intra-regional transfers are excluded.

· It provides a four-year forecast on the size of the formal global consumer money transfer market.

Highlights

In May 2004, ten countries from Central and Eastern Europe will join the EU. Many will not be granted 'freedom of movement of persons' for work purposes immediately. However, it is expected that after the end of the transition period workers from these new EU-countries will positively impact on the migrant population in the other EU-countries.

PayPal is still a mainly US focused solution. The company is based in California, the vast majority of its customers can be found in the US and while individuals in almost 40 countries can open a PayPal account in many countries, many users cannot withdraw funds to a bank account.

Yahoo! PayDirect has been in existence for several years but was never the first choice for online person-to-person payments. PayPal is by far the leader. Although Yahoo! PayDirect International offers extra features over PayPal, there is the issue whether Yahoo! brand is strong enough to convince customers to transfer significant sum of money.

Reasons to Purchase

· It provides you with a thorough understanding of how the market works.

· It gives you an insight in the future direction of the market and hence assists you in designing your strategic planning.

· It gives you information on the size of the flow of remittances between regions and helps you determine where the opportunities lie.

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ABOUT DATAMONITOR	2
TABLE OF CONTENTS	3
CHAPTER 1 INTRODUCTION	7
The Cards & Payments Briefings Service	7
What is this briefing about?	7
Scope of the briefing	7
Who is the target reader?	8
How to use this briefing	8
CHAPTER 2 SIZING THE GLOBAL CONSUMER MONEY TRANSFER MARKET	10
Market sizing	10
Data is grouped under seven regions	10
The formal global consumer money transfer market accounted for US$57.6 billion in 2003	11
Inflows and outflows of remittances per region	12
Asia Pacific is the biggest recipient region	14
A higher level of remittances is being sent from Western Europe and North America to other regions	14
Share of remittance inflows and outflows per region	14
Exclusions	15
Informal Money Transfer Systems	15
The 'Hawala' system is the most widely used IMTS	16
The size of the IMTS market is estimated to be worth more than US$100 billion	17
The drivers behind the existence of IMTS	18
Drivers of the global consumer transfer money market	18
Migrant population	19
GDP of the hosting country and flexibility of the labor market	19
The cost of living in the hosting country	19
Regulatory framework	20
The migrant population in Western Europe is expected to increase with the accession of ten Eastern and Central European countries into the EU	20
Expatriates	20
Foreign students	20
Political stability	21
Summary	21
CHAPTER 3 MONEY TRANSFER INSTRUMENTS	22
Classification of money transfer instruments	22
Money transfer facilitators	22
The process	22
Fees charged by such providers are high	23
Examples of cash collection money transfer providers	23
BBVA: capitalizing on the Latin American market through an established presence	24
Dinero Express's money transfer services are rather basic	25
Dinero Express's expansion in Spain has accelerated with its strategic partnership with Telefonica	25
...whereas expansion in the Latin American market was facilitated by the predominent presence of BBVA's retail bank network in this region	25
BBVA's target is to occupy at least 20 per cent of the Latin American migrant population in Spain by the end of 2004	26
BBVA's wider strategy is to cross-sell its banking services to migrants	26
Datamonitor Cards Team views	26
Conventional banking money transfer systems	27
International drafts and money orders	27
Bank wires	28
Other providers of wire services	29
Emerging consumer money transfer instruments	29
Online wallets	30
PayPal: global or not?	30
PayPal's money transfer services	31
Customers have a choice of five currencies	31
PayPal is considered as a global money transfer service provider but reality differs	32
PayPal practises a differentiated price strategy	32
Datamonitor Cards Team view	33
Moneybookers: an online provider with potential	34
How does Moneybookers operate?	34
Option one - recipient has an online account with Moneybookers	34
Option two - recipient does not have an online account with Moneybookers	34
Moneybookers has witnessed considerable expansion in its customer base	34
Moneybookers's strengths are multi-fold	35
Datamonitor Cards Team view	36
ATM withdrawal	36
Yahoo! PayDirect International: providing conveniency to customers?	38
Consumers have two options to send money	38
Yahoo! has chosen its money transfer systems based on conveniency for the consumer	38
Datamonitor Cards Team view	39
Benchmarking money transfer instruments	40
Summary	42
CHAPTER 4 FORECASTING THE GLOBAL CONSUMER MONEY TRANSFER MARKET	44
GDP is a key macro-economic factor when forecasting inflows and outflows of remittance	44
Soft factors	44
Exclusion	45
The global consumer money transfer market will reach US$69.8 billion in 2007	45
The thought process behind the forecast	46
Conclusions	50
Traditional providers are losing ground with the emergence of new money transfer instruments	51
The remittance market is not only a profitable market but it also provides further opportunities	51
APPENDIX	52
Supplementary data	52
ATM withdrawal	56
CAGR	56
Conventional banking money transfer systems	56
Emerging money transfer systems	57
Hawaladar	57
IMTS	57
Inflow of remittances	57
Money transfer facilitators	57
Online wallets	57
Outflow of remittances	57
Market sizing methodology	58
Step 1: Calculation of outflow of remittances	58
Filling the gaps	58
Data sources	59
Step 2: Calculation of inflow of remittances	59
Filling the gaps	59
Data sources	59
Step 3: Estimating the propensity to use money transfer services	59
Step 4: Calculation of the global consumer money transfer market - inflows and outflows	60
Forecasting methodology	60
Research methodology	61
Future readings	61
Current related Datamonitor reports and briefings	61
Future reports and briefings	61
Relevant links	62
Datamonitor's custom research capabilities	62
SPP writing team	64
How to contact experts in your industry	65
List of Tables
Table 1: Share of inflows and outflows by region, 2001-2003	15
Table 2: Examples of cash collection money transfer providers	24
Table 3: Examples of providers of international drafts and money services, other than banks	28
Table 4: Examples of providers of wire money transfer services, other than banks	29
Table 5: Examples of international online account-based money transfer providers	30
Table 6: Fees charged by PayPal	33
Table 7: Fees charged by moneybookers	35
Table 8: Examples of international online account-based money transfer providers that offer ATM withdrawal services	37
Table 9: A benchmarking exercise for money transfer instruments	41
Table 10: The global consumer money transfer market, 2004-2007	48
Table 11: List of countries included by region (Table 1 of 2)	53
Table 13: The global money transfer market, 2001-2003	54
Table 14: The global money transfer market split by regions, 2001-2003	54
Table 15: The forecasted global consumer money transfer split by regions, 2004-2007	55
Table 16: Forecasted share of inflows and outflows by region, 2004 to 2007	56
List of Figures
Figure 1: The global consumer money transfer market represented $57.6 billion in 2003	11
Figure 2: Western Europe is the biggest remittance sender, whereas Asia Pacific is the biggest recipient, 2001-2003	13
Figure 3: The 'Hawala' system	16
Figure 4: The thought process behind Datamonitor's forecast	46
Figure 5: The global consumer money transfer market, 2004-2007	48
Figure 6: Forecasted inflows by regions, 2004-2007	49
Figure 7: Forecasted outflows by regions, 2004-2007	50
Figure 8: Datamonitor's core consulting capabilities	64

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