We all expect that when we carry money from one place to another that the value of the money will remain the same.

This cannot be said however, when we ask a third party to move the money for us, especially if it has to cross an international border. Most people don’t realize the extent of the costs to move money until they have an urgent need and at that point they are in no position to negotiate.

The people most severely impacted by money movement costs are migrant workers and immigrants. These people are working in the USA and other wealthy nations and in many cases have a responsibility to send money back to their family members in their native country on a regular basis.

In the so-called developed world, you might think that our banks could help the immigrants.  The banks have a “wire transfer” service but it was never intended to be used for small values.  The service charges range from $30 to $60 plus foreign exchange costs and there are receiver fees as well.  And of course your family must have a bank account at the other side of the transfer.

What are the Alternatives?

The alternative used for over twenty years has been the cash to cash money transfer systems created by the likes of Western Union, Moneygram and Ria.  Healthy competition in this space has forced prices down over time, but due to the use of cash at both ends of the transaction, they have probably hit the limit for how low prices can go.

What about the new breed of online money remitters like Xoom, Worldremit, Azimo and Transferwise? They have been part of the competitive movement to reduce money transfer charges but the reality is that with payments being made online by credit card there is yet another mouth to feed in form of “Interchange” fees charged by the card companies.  

It does not stop there. Facebook recently announced their intentions to dip a toe into the remittance space and others are putting their money down too.  American Express invested in Bluebird, Mastercard invested with HomeSend, Visa with Fundamo and Paypal into several startups.  All this money is chasing the same goal. To reinvent how money is moved.

But a silent revolution is underway.

With the incredible rise in mobile phone penetration globally, people in even the most remote places have constant connectivity to the outside world. This real time connectivity is creating opportunities to serve these remote populations directly, without the need for brick and mortar locations or even websites!

As the money remittance business is struggling to reinvent itself, a complimentary ecosystem of “Product Remittance” has arisen to fill the gap.  You see, like money, goods and services can also be digitized and transferred across national or international boundaries instantaneously... and more importantly they appear to transfer for no cost.

Prepay Nation has taken the lead in this space with a thriving network that transfers Mobile Airtime, a service used every day by family members of migrant workers in their home country. This value is transferred in real time and without fees.

In some cases the recipient received as much as 200% more value, thanks to our partnerships with Mobile Network Operators.

A majority of these transactions are small, as low as $1, and are sent across international boundaries—and not only has their money not lost value in the transaction, in some cases the recipient has actually received more value than what was sent!

How does this work?

This complementary business model of product remittance is driven by the service providers themselves. Mobile Network Operators (MNOs) provide mobile airtime transfers, utility companies create prepaid utilities and retailers, like pharmacy and grocery chains, create prepaid medication and food vouchers.

Collectively, when integrated with value transfer platforms like Prepay Nation's, they create an interconnected virtual ecosystem capable of moving all kinds of digitized values across international boundaries efficiently without the losses associated with conventional money remittance—and, as we've seen, sometimes even benefitting from subsidies and bonus offers by the retailers in the recipient country and gaining value in the transaction.ppn.howitworks.web

Innovations like this not only create exciting opportunities for business to reach millions of expatriate customers, but ultimately result in a major win for cash-based immigrant workers who want to help their families back home. The key is offering a range of essentials that can be purchased with cash, and transferred digitally, instantly and without fees. That is the world we are working towards at Prepay Nation, and the bigger and more diverse it gets, the more exciting it is for everyone involved!


Anurag Jain

With a career spanning 17 years, Anurag Jain has extensive telecom industry experience, working in e-commerce and enterprise software in India and USA, both at young stage companies and large corporations. He has a history of successful business development, including his previous startup MagicPins, one of the leading processors of airtime in the US. Anurag is a Telecom Engineer by training and has earned a Masters in Technology Management from the University of Pennsylvania and Wharton Business School.

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