WorldRemit is targeting mobile wallets in emerging markets in a bid to eventually set a standard for international mobile money transfers.

The London-based online remittance company is looking to disrupt traditional players like Western Union and MoneyGram and establish itself as a less expensive and safer alternative. WorldRemit got a financial shot in the arm in March to pursue that goal when it received $40 million in funding from Accel Partners.

WorldRemit currently sends remittances from 35 countries to more than 100 countries, and it's eyeing expansion into other markets.

"We are trying to introduce digital to every traditional money remittance corridor," says WorldRemit CEO Ismail Ahmed.

The company operates under what it considers a low-risk model by "never touching cash" from the sender, Ahmed says. Depending on the region, recipients may be able to pick up funds as cash, but the sender must use a bank account or a payment card linked to a bank account.

"Traditional companies rely on agents to collect cash, but we rely on acquiring banks to send and collect money," Ahmed says. "It is far easier to capture a digital footprint of the customer from the time they obtain the money from the bank to the completion of the transfer."

Remittance providers are keenly aware that banks are cutting cross-border transfer services in some emerging markets because they don't want to take on potential risks of supporting drug trafficking or terrorist activities. As banks step back, many more remittance services or alternative payment providers are finding their niche in these markets.

"This is where the remittances are moving to online money transfers and the banks that are shutting down wire transfers are now working with online players," Ahmed adds.

WorldRemit recently partnered with Econet and its EcoCash mobile wallet in Zimbabwe, as well as the Tigo Pesa mobile wallet in Tanzania. Both collaborations demonstrate WorldRemit's approach to African markets in which a majority of consumers have smartphones, but few have bank accounts or access to banking services.

Migrants in other countries sent $75 million to families in Tanzania in 2013, according to World Bank figures. WorldRemit wants its online service to become a part of that process.

"We have much lower fees, ranging from less than a 1 euro ($1.36 U.S.), up to 25 euros, and that encourages users to send smaller and more frequent transactions," Ahmed says. Its process also discourages money laundering, which can be common when significant cash transfers occur, he adds.

WorldRemit has a significant opportunity to provide money transfer services if its fees stay low and consumers trust its system, says Scott Strumello of New York- and London-based Auriemma Consulting Group.

"In a lot of developing markets, cash is king and people will bring a stack of bills into a Western Union station to send to families," Strumello says. "But technology comes into play, and if you can send money to a mobile wallet, that's a compelling story to tell."

In Africa, more than half of WorldRemit's transfers go to a mobile wallet. In India WorldRemit has no cash pickups at all, Ahmed says.

WorldRemit has no physical branches or agent stations. For now, WorldRemit supports online transfers to mobile wallets or to banks or licensed providers for recipients to pick up cash. It doesn't foresee Bitcoin or other digital currencies being part of its system.

Bitcoin has a regulatory risk associated with it and its cost advantage could disappear, Ahmed says. "In that way, it becomes more expensive than traditional remittance."

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