TransferGuru provides a comprehensive comparison of international money transfer services. We are bringing the entire market together to give users clarity on provider choice. Our platform has three key features:
1) Real time comparisons of providers’ exchange rates, fixed fees, transfer times and user reviews.
2) Robust back-end that uses scalable data-aggregation technology to cover all providers in all corridors.
3) Engaging site content created through an efficient content management system, to build user engagement and trust. Such content - from a regular blog to informational guides on the remittance industry - better inform users of the service they require. We believe our commitment to provide impartial content makes us a voice of authority in this industry.
No transfer provider is consistently best, therefore real-time search platforms are crucial.
Our platform will impact users and providers of international money transfer services in four ways:
1) users will be able to access cheaper, potentially more apt services for their need. Without a platform like ours, they have no way of knowing all operators for the corridor through which they are sending money, nor which are most competitive for their transaction value range.
2) smaller, less well known providers who offer cheaper services but are otherwise poorly marketed will become more visible, as they will be featured on equal footing with established incumbents. These competitive new services will be able to establish trust through aggregated user ratings, rather than continuing to rely on advertising and word-of-mouth within the corridors in which they operate. Our ability to show reviews for a given corridor will further tailor this reputation-building.
3) By being placed next to cheaper competitors, high-margin service providers will be forced to provide a more efficient service, as users will directly quantify the difference in services offered. This will contribute to bringing down industry averages as a whole, helping us reach the G20 target for 5% global average remittance fees.
4) Underserved transfer corridors will become populated with new providers as it becomes clear that certain segments of user demand is not met. We will produce engaging user content to highlight inefficiencies in the industry - such as countries that until now have been unable to service remittance due to a lack of financial infrastructure - so that providers are prompted to better service the industry.
Substantial accomplishments to date
From idea to fully functioning platform in 8 months, TransferGuru is ready to go! Launched online in September 2015 with an alpha site featuring 10 providers, we have since:
1) Established a base of 15,000 monthly visitors to the site, driving the acquisition cost down to £0.25 per user.
2) Built a beta site from the ground up in Python, after rigorous testing, integrating scalable technology that will allow us to feature an exponential number of providers. The site also has drastically improved user experience to make the process of comparison and feedback seamless.
3) Started to garner user retention. This validates our assertion that money transfer comparison is dynamic: no provider consistently dominates searches as cheapest across any corridor. This means there is a lasting need for our product.
Started to build channels of revenue generation through partnerships with money transfer providers. By May 2016 we're aiming to be generating revenue for 90% of converted users.
TransferGuru is free to use for the customer. It generates revenue from referred users.
Money transfer providers are featured in the corridors within which they operate and show up in user searches on the site. Having built up traction to prove the quality of traffic passing through our site, we have begun approaching providers to build partnerships. So far we have secured accounts with 9 providers, and are already negotiating another 16. By end of 2016 Q2, we estimate at least 30 contracts will be in place, generating revenue from 90% of our converted users.
On searches of £4,000 and above (or equivalent in other currencies) providers pay TransferGuru a percentage of revenue generated from every completed we refer. This revenue sharing contract applies for all transactions the customer makes over a minimum of 12 months. On searches below £4,000 we operate on a flat fee basis for providers, ensuring the value of the customer remains above the cost of acquiring them, despite transaction margins being lower at low transaction levels.
Use of proceeds
Our target of £65k will be spent on:
1) Financing the company’s staff requirements until it becomes cash flow positive (retaining the team described below).
2) Finance advertising and marketing to the highest-value corridors to establish us as market leaders in money transfer comparison.
Any funds raised beyond our target will allow us to capitalise on user growth momentum and reach some of our bigger goals, including creating iterations of the site in French, Spanish, Arabic and Mandarin, expanding the target audience to non-English speaking remitters. Additional funding will also allow us to increase our marketing expenditure.
Note: The Company has outstanding debt of £72.5k from existing shareholders. The proceeds of investment will not be used to repay these loans.
The target market for TransferGuru can be defined in three categories:
1) The first typical user regularly supports family, extended family, or friends in their home country through financial gifts. This is often referred to as remittance. The users in this group often have strong cultural links to home and their local diaspora community; they rely heavily on word of mouth to build trust, and are likely to face higher remittance fees due to their reliance on older and non-digital money transfer operators. Once made aware to cheaper options through our platform, this group exhibits a propensity to repeatedly use the comparison service.
2) The second group are also often economically active in more than one country and so have a variety of currency needs. They also typically make small frequent transfers. Younger and sometimes in higher-skilled jobs, their needs could include paying back student loans, paying back a mortgage or meeting other commitments, or simply investing/saving in their home country account. These users are better integrated with the culture of the country in which they work and more digitally savvy. This makes it easier to access them through mainstream channels including digital advertising.
3) The third typical user does not make regular payments abroad, unlike the previous two categories. They make one-off transfers of large amounts of money, for example for buying or selling property, to move their pension deposits, or large investments. We feature a range of FX brokers who handle large sum transfers to cater to this category.
We have market-tested six different corridors (UK to India, USA, Nigeria, Poland, Pakistan, and France). With the new iteration of the website and the move to a .com domain we are expanding our marketing strategy to target 50 receiving countries. Multi-lingual iterations of the site will expand upon this, to include the US, UAE and China as sending countries as well.
Characteristics of target market
The market for remittances is worth over $600bn, growing at an average rate of 9% per year. Digital remittances form 6% of the global market.
In 2015, remittance service providers generated more than $40bn in revenue. Digital providers are increasing market share and putting pressure on the whole market to lower prices, with a new focus on efficient fraud prevention, customer service, and user-friendly products. Traditional operators have responded by lowering fees to compete, and beginning online ventures - e.g. Western Union’s digital share of total revenue has doubled in the last two years. But providers face criticism for complicated fee structures and high margins, despite the entry of cheaper competitors.
With no way of assessing providers, most customers are unaware of the range of choice they have. Four in five regular remitters think their current choice of provider is either too expensive or too slow. Two in three do not know a cheaper option than the one they use exists.
Our marketing strategy relies on content, demographically specific outreach, and tailored advertising to gain traction, convert users, and build a reputation of trustworthiness.
In terms of content, we deploy blogs, videos, animations, and infographics to build trust and awareness, encourage transparency, and equip users with educational tools to help them make better choices. As well as small-scale news items, we address macro-narratives of personal information control, social justice and democratising financial expertise. This strategy helps build a long standing relationship with our users. The host of written and multimedia content we have produced so far focuses on UK-outbound remitters, and we will expand into remaining corridors. We will also continue our research and publish our insights into the remittance industry. We are also working on a number of widgets, browser extensions and interactive elements, to increase access to our tools and content. Meanwhile, we are expanding access to the team as a whole, with a range of interviews, video content and blog feeds. This will allow us to provide the company with a human face and a common point of feedback from users, but also set the agenda on industry issues in the media like personal finance and gender in tech.
Demographic outreach relies on a solid understanding of our diverse users. While many can be accessed via mainstream advertising channels, we will also deploy strategic partnerships with complementing services to leverage new audiences. This is particularly important for users who are less well integrated with their resident community.
Advertising on search engines and social media, as well as SEO, have been at the forefront of our strategy since the site’s launch in order to gain rapid traction. Having established a digital user base, we will gain non-digital users through community-specific printed publications, diaspora radio stations and cultural society events.
We aim to succeed against potential competitors in five ways:
1) To our knowledge there is no remittance comparer that provides live and comprehensive data. This is vital as the market is dynamic: at any given time, different service providers are cheaper in different corridors and for different transfer values. No transfer provider is consistently best, therefore real-time search platforms are crucial. As far as we know one currently does not exist - our closest competitors feature only a fraction of the providers and corridors as our technology facilitates. Following this fundraising round we will aim to establish ourselves as market leaders in the current market.
2) Within the next year we aim to integrate the 94% of the remittance market that remains non-digital, by building an app that allows remitters to search for cash transfer agents based on location data. This would make us one of the few platforms to integrate digital and nondigital options.
3) TransferGuru is impartial towards providers (e.g. providers cannot pay to feature at the top of our comparisons), building our reputation as a credible source of information to consumers. Growing our user base and customer retention relies heavily on building trust. We believe this impartiality, alongside our integration of user reviews incorporating three metrics will make us a voice of authority in this industry. Doing so will place us ahead of later challengers.
4) Our home in London places us within a vibrant multi-national community. We are located close to a host of rapidly expanding digital money transfer operators, allowing us to grow with our partners, build long lasting relationships with future market leaders, and influence the development of tracking systems and analytics.
5) Such a rapidly growing market will no doubt attract the attention of generic comparison sites. But building a comprehensive money transfer comparison application is a technically challenging task. Our system relies on heavy data aggregation methodology - a field we have strong expertise in.
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