World Bank has named Transfast No 1 for sending funds from the US to Egypt, in the $200 and $500 remittances category, while Western Union came in seventh place.
Samish Kumar, Transfast CEO, spoke to Daily News Egypt about the business in Egypt and its strategy to increase its activities.
Could you summarise what Transfast business does?
Transfast is a global company for finance transfer and payments and covers 120 countries across the Americas, Asia, Africa and Europe. We have licences to safety transactions around the world. We are considered the best network to move funds across the world. We have 200,000 points of payment around the world.
What services does the company provide for Egyptians that other companies do not?
Egypt is very important market for us for two reasons. Firstly for remittances, Egypt is the top recipient of remits around the world. Remittances come from North America, Europe, the Middle East and Australia. Secondly, we operate the largest network to originate remittances from North America, Europe, and the Middle East.
What is unique for Transfast is that 8 million Egyptians live abroad and they can send remittances through our network via multiple channels. This means Egyptians can go to locations to send money through a bank, financial institution or retail partner part. In addition, they can send money via mobile or online. So Transfast can provide a cheaper channel that is more convenient to Egyptians abroad when they send money home.
Egyptians send about $20bn per year. Approximately 60% of that amount comes from the Gulf counties such as Saudi Arabia, the UAE, Kuwait, Qatar, and Bahrain, while the rest comes from the US, Canada , Europe and another parts of Africa.
In the Middle East, we operate the largest network of partners that includes banks and financial institutions, which is very important in bringing remittances to Egypt. Through our partners in places like the US, Canada and Europe, Egyptians can go to banking or retail locations and send money to Egypt.
We provide value and convenient services for Egyptians; in addition, we offer very competitive fees as we charge much lower than banks charge. In North America, fees for sending money are much higher. If you send money home via JP Morgan Chase, for example, you pay $40 to $45 just to send $500 to Egypt. With us you can send this same amount for less than $10.
Therefore, when you send $500 to your family here in Egypt through Transfast, your family will receive more than [they would through other banks].
We have 44 customer service centres for the customer to call when there is any issue and have the problem solved.
We are working with Egyptian banks to continue expanding our presence in Egypt. We cooperate with Banque du Caire and the United Bank of Egypt. We are in discussion with other leading banks in Egypt, so in the next two months we will make the announcement.
Currently, through our bank partners, we can credit almost any bank account in Egypt. However, if a customer wants to pick up cash, they must go to Banque du Caire or United Bank.
We offer a “Transpay” product, which is designed to transfer payments from abroad to Egypt, related to private sector. This product is also suitable for freelancers, another area I think is important for Egypt. Transpay facilitates the transfer of money for Egyptian freelancers who work for companies abroad so they can be paid in dollars.
How much in Egyptian remittances does the company transmit? What is the target?
We disclosed that we transfer $1bn around the world. Egypt is relatively new market for us, our goal is to transfer $100m by March 2017. We started our business in Egypt almost two years ago, and in 2015, we transferred $50m.
What is the size of the company’s investments?
We have about $1.5bn in investment funds called Growth Capital Partners (GCP). The fund is based in New York and licensed to send transactions around the world.
We have 200,000 payment point “locations”.
What is the value of the transfer fees levied on the amounts to be remitted?
Our transfer fees are 80% lower than US banks charge. Our fees are 50% better than Egyptian banks.
What was the value of remittances transferred by the company last year?
The company transferred approximately $6bn globally.
What currencies does the company permit for Egyptian remits?
In term of currency pairs, we transfer from dollars into Egyptian pounds, from dollar into Indian rupees, euros into Egyptian pounds, as well as 1,000 further currency pairs.
Do you think the devaluation of the Egyptian pound against the dollar and the shortage in foreign currency will affect remittances?
Remittances are the most reliable source of capital for developing countries like Egypt, India, Pakistan, Nigeria, and others. Remittances continue to grow in Egypt. In a slow economy, foreign investment can slow down remittances, but generally remittances remain stable because people abroad send more money to support their families back in Egypt. Therefore, remittances remain steady and continue to grow and support the economy, as the $20bn received in remittances contribute to finance, education and other economic activities and provide hard currency for the Central Bank of Egypt.
I met President Al-Sisi in New York and he was aggressively encouraging investment in the country and is working hard to build the confidence of investors and Egyptians living abroad. With that confidence, we will see more capital come into Egypt in the future.
Do you think the informal market will affect remittances?
The Egyptian pound is not the only currency that has dropped in value in the past 24 months. Emerging markets, as a whole, witnessed depreciation of their currencies. From time to time, when the currency falls, people wait for about two weeks to transfer money. They would wait longer but they need to send money to their families.
How will the company compete with other money transfer companies in the Egyptian market?
Firstly, we are pioneers of launching instant banks and direct banks’ deposits. Today, we are the largest direct bank network in the world. In 2009, we were the first to launch instant banking. In Egypt, we offer customers the choice to send money using cash or from their bank account.
We are 20% to 25% cheaper than other traditional money transfers. We can transfer money in seconds instead of the five days that other channels take.
What is the period taken to transfer mobile money?
If a customer sends cash, it will take minutes. If the customer sends money online, we have two products: a three-day product and a minutes product. The three-day product is at a lower rate than the latter. The minutes product is designed for urgent cases.
How many Egyptians use mobile money?
The number of Egyptians using mobile money is still small but is growing dramatically and I expect that it will become 40% to 50% of the total market.
How do you guarantee low-risk services for online remittances?
We invest heavily in security, which is very important to our business. We perform background checks and ensure that our online and mobile services are secure to prevent fraud or theft.
How many African countries are served by the company?
About 20 countries we serve are part of our network, as we are very committed to Africa. We serve all francophone countries. We started in Nigeria about three years ago and we transferred about $700m last year.