Getting lots of money from point A to point B is pretty easy if you have lots of money. If you want to send a little money, however, you run into a lot of problems. That’s where TransferTo comes in. The company, which was founded in 2006 but has recently hit its stride in the international remittance world, can send small amounts of money around the world and customers can receive cash, store credit or airtime. In short, it’s a fascinating workaround that allows the unbanked and other parties to send money on the cheap.
“Once I was travelling to the Philippines and I saw two persons in the street sharing their prepaid balance simply by sending a SMS,” said the founder Eric Barbier. “This experience gave me the vision that one day people will be able to share money worldwide directly from their mobile in the same way they send to each other SMS all the time. And that’s how I got the idea of TransferTo.”
The company is privately owned and has partnered with Xoom, PayPal and Western Union to provide money-sending services. They handle over 50 million transactions a year in 100 countries mostly in the form of airtime credits. They are working with the “unbanked and newly banked” customers in developing markets.
“TransferTo is building the leading global mobile remittance hub,” said Barbier. “TransferTo offers real-time remittances of mobile airitme, goods and services, and mobile money. We connect financial institutions and mobile operators worldwide. A nephew in Dubai sends mobile money to an aunt in Bangladesh. A mother in Hong Kong pays thetuition of a son studying in the Philippines. A grandson in Miami tops up the prepaid phone of his grandfather in Mexico.”
The system works by sending airtime – which is as good as cash in some areas – between phones. By partnering with telcos and carriers in various countries, users can send money securely. Because they cannot be refunded, officially cashed out, or taxed you save a considerable amount on the transfer and because it isn’t a money transfer service it isn’t overly regulated. They also work with money transfer operators who can act as official endpoints. The average amount sent is between $2 and $15, numbers far too small for most major money senders to care about.
TransferTo is virtually invisible to the end user and they are doing brisk business even without branding. Ultimately TransferTo is an interesting piping play and is becoming increasingly important in a world where smartphones rule.