An Analysis on Peer-to-Peer Transnational Money Transfer and its Business Model：A Case Study of TransferWise
Date Issued
2016
Date
2016
Author(s)
Jeng, Shyi-Yeuan
Abstract
Fintech is a dynamic segment at the intersection of financial services and technology sectors where technology-focused start-ups and new market entrants innovate the products and services provided by the traditional financial services industry. Payment, for example, which is dominated by the traditional financial services industry has been inroaded by PayPal, Apple Pay etc. There have been some new entrants in the transnational money transfer business in recent years. For example, British company – TransferWise, with its P2P transnational money transfer, it reduces the required fee, and currently accumulated transfers over three billion euros, accounting for 2% of the whole UK market. What’s the special of P2P transnational money transfer? How TransferWise attract investor and users? Therefore, the thesis will use an in depth case study approach to understand how P2P transnational money transfer works and recognize its business model. This thesis also investigates the source of value creation, and finally to give some recommendations for future development. With case studies, we found that TransferWise successfully reduced the required transfer fee and information asymmetry, due to the interaction and strengthen from the four elements of business model. Meet the efficiency, lock-in, innovative, in its value creation, and future may be extended to complementary products. There are some problems that TransferWise needs to concern, however, such as high customer acquisition costs may result an ineffective marketing, customer repurchase might be too low to affect the total revenue, and as the expansion of its business scope, gross margin may be eroded. Finally, compared with P2P lending, P2P transnational money transfer is a relatively new concept and business model. Although the demand side of Taiwan market has favorable environment to duplicate its model, however, it still depends on the attitude of the government toward this new business model. Even if the authorities are actively promoting the development of Fintech in Taiwan, it still has a lot of limitations and regulations on the viability of this model in Taiwan.
Subjects
Fintech
P2P transnational money transfer
Payment Intermediation
Business model
Value creation
Type
thesis