Spanish bank BBVA launched an app-based service, called Tuyyo, enabling consumers to easily send remittances to people in Latin America and the Caribbean. Tuyyo — which is initially launching for US to Mexico transfers and will later be rolled out to the rest of Latin America — allows users to send money to Mexico 24/7.
Recipients can access the funds within minutes, retrieve the money via ATM, bank account, or cash pickup locations, and minimize the costs involved with retrieving money. The app is compatible with iOS and Android devices.
Remittances are a massive global market, poised to grow from $575 billion globally in 2016 to $615 billion in 2018.
- Mexico is a significant market to enter, as it’s the fourth-largest recipient of global remittances. Remittances to Mexico reached an all-time high of $26.97 billion in 2016, an 8.8% increase from 2015, according to research from BBVA. And 95.4% of remittances to Mexico came from the US, making it a popular channel for Tuyyo to target first.
- Tuyyo allows BBVA to compete with digital-first firms. BBVA has powered money transfers to Mexico since 1995, and has since expanded to other key Latin American markets. Launching a digital platform allows BBVA to compete with digital-first players like WorldRemit, which sees over 700,000 monthly transactions. Digital-first remittance offerings are popular because they are less expensive than traditional services. But because Tuyyo is a bank-based offering, which is typically even more expensive, it might be popular because it’s convenient and cheap, allowing it to compete.
- Quantifies how large the remittance market currently is.
- Discusses what some of the barriers to growth have been for the remittance industry in recent years.
- Identifies what factors are going to lead to continued growth going forward.
- Considers ways digital-first startups have begun to disrupt traditional remittance companies and bring down fees.
- Breaks down what legacy firms are doing to hold off these challengers, while also evolving with the changing technological trends occurring globally.
- Explores what firms in the industry will have to do going forward in order to avoid being outperformed in an industry that is becoming increasingly saturated.
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