Fresh off its success in the Philippines, Seattle-based transfer company Remitly is using mobile security and other digital features to tap other markets, where an endless supply of competitors and fraudsters await it.
"The remittance market is huge," said Matt Oppenheimer, CEO of Remitly, which recently received a $12.5 million investment from Draper Fisher Jurveston and DN Capital to pursue markets in Asia, Latin America and the South Pacific. "We don't think there is a good customer experience being provided in these markets."
Remitly's first market outside the Philippines is India, with other markets to follow. In its initial push in the Philippines, the Seattle-based Remitly reached $100 million in transfers in 2014, a 400% growth over the prior year.
Oppenheimer contends the service's mobile user experience, which includes tracking, interface design, navigation tools, text-message alerts and verbal alerts, is the cause of that growth.
"When I was in Kenya, I found it very inconvenient and difficult to transfer money internationally, which gave me the idea to create an easier way to do it," said Oppenheimer, who founded Remitly in 2011 after working for Barclays in Africa. Remitly enables instant transfers for debit and credit cards, and three-day availability for bank transfers with fees ranging from 2% to 4%, less than the general industry pricing, which is about 8%. Remitly attributes the discount to its low overhead and focus on the lower-cost mobile channel.
The international remittance market is crowded and often combative, with digital startups sparring with incumbents such as Western Union and MoneyGram over the benefits of mobile delivery over a large physical presence.
To improve its security, Remitly has added Apple's Touch ID fingerprint biometric authentication service, as well as the ability to track foreign exchange rates in real time. Remitly plans to add other biometric types and devices in the future.
"There is a lot that you can do with biometrics, such as facial recognition and voice, that we can continue to add as we grow the business," Oppenheimer said.
Remitly considers biometrics a convenience for recurring users, but it's also an additional security measure for an industry that carries more risk than other types of person-to-person transfers. Remitly also uses technology that flags characteristics that are inconsistent with a customer's past usage, and also uses service providers to verify personal and financial information.
"You can't have a convenience service unless there is a level of trust there," Oppenheimer said. "Touch ID can be used to execute transfers with minimal work on behalf of the users."
Biometric identification is starting to gain hold in the remittance industry, and Touch ID is gaining a foothold in a number of other payment categories. And the growth of fingerprint authentication and facial recognition suggest biometrics may be catching on after years of stagnation.
But for cross-border transfers, there are still myriad security challenges and biometrics alone are likely not enough.
"The ability to positively affirm that the actor on the other end of a remote channel is in fact a company's good customer is a key element to risk management and mitigation," said Julie Conroy, a research director at Aite Group, who said she is talking to a number of entities about this issue.
There are many downstream risk management concerns in remittance, such as whether to enable bank customers to initiate higher-risk transactions from a mobile device.
"The biometric can certainly help with more effective ingoing customer identification, although there is still an enrollment challenge. You have to be sure that the person whose biometric you are enrolling is indeed the genuine customer," Conroy said. "And the biometric is by no means a silver bullet. It too is a static data element."