how to setup a money transfer business?
TRANSCRIPT
Uberization of Money Transfers (Remittances)
A collective approach to solving the US money transfer market problem for startups and fintechs
Our mission is simple:To provide a unified, multi-domain platform for money-transfer. With each participant contributing towards licensing and also benefiting from pooled earnings.
The problem
How can an MSB licensed in one state only, legally on-board transactions from other states?
How can an MSB that has corresponding agreements with let us say two beneficiary countries expand into other countries?
How can they get more business?
How can they get access to a unified platform?
The problem
How can they allow other businesses to benefit from their license without being subjected to any regulatory approval?
How can they continue to operate without exposing themselves to risk?
Who will put together the alliance and how will it work?
The common denominator for an alliance solution comes down to basic operating guidelines and
agreements.
The solutionCollaborative
NetworkPower
Find MSBs who hold licenses for a specific territory
Provide a unified platform (that can be multi-domain)
Provide a basic transaction set and how its settlement will be done
Assign affiliate agreements for generating business
The solutionCollaborative
NetworkPower
Find processing partners for payments
Establish a baseline KYC/AML program
Agree on cross-settlement mechanics (including pricing)
Seek legal opinion on flow of funds for transaction set
Money TransferOperator
Affiliate(Reseller)
Money TransferOperator
Affiliate (Reseller)
Affiliate (Reseller)
Affiliate (Reseller)
Money TransferOperator
Affiliate (Reseller)
Affiliate (Reseller)
Affiliate (Reseller)
How it works
Step 1
Affiliate Agreement
Sign affiliate agreement with each:
● Platform (Domain)● Other MSBs in the
network
Step 2
Define Licensing
For each platform, enter the state(s) for which you are licensed for.
Step 3
Define Pricing
Display your pricing for each client transaction that may be sent your way.
How it works
Step 4
Define Corridors
Let others in your network know which corridors you have an agreement with for onward termination.
Step 5
Pass-Thru Pricing
For transactions picked up by others in the network and passed onto you, provide pricing for such transactions.
Step 6
Domain Goes Live
Platform provider goes live. Your pricing will determine if transaction come your way or not (as there can be multiple providers competing for the same business)
Flow of funds is strictly between licensed entities. All of whom have
a signed correspondent agreement with each other.
The most important takeaway is that Affiliates never touch the
money.
Revenue model
Affiliate
Transaction based● On every transfer.
License Holder
Transaction based● On every direct and
intermediary transfer.
SaaS Platform
Recurring● Plus small fixed fee
per transaction.
Fact:
More than 80% of US MSBs who are MTOs are struggling on all fronts: new business, banking, online presence, licensing, expansion, technology, access to new corridors, competition.
Based on a closed survey
Milestones
Partnerships Feb/Mar 2016Seeking interests from Licensed MSBs, Payment Providers, 3PPP, Correspondent Banks
Trial Setups Mar/Apr 2016Work with select partners for additional proof of concept.
May 2016Launch limited services with select partners.
June 2016Full-fledged commercial launch with multiple partners
