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I have been an OFW since 1981. I still remember how difficult it was to send money to Philippines. Back then, there was no western union or MoneyGram or money transfer outlet where I was working. The only way to send money to Philippines was through local banks. The remittance fee was so expensive and the exchange rate was very low.

My mother normally would go to Philippine National Bank to claim my remittance after two weeks that I made a money transfer. At the time, no cash pick up service was available. Either we send money via bank transfer or through a person who was scheduled to fly home and agreed to bring home and deliver the money to my beneficiary.

Then, during the ’90s, western union and Moneygram started to become popular. These two global money transfer companies dominated the remittance market for a long, long time. Their partner-outlets were under exclusive contract with them. Because of the duopoly, remittance fees were expensive and exchange rates were low.

During the Y2K, many small players started to also offer money transfer service. There was a proliferation of small money transfer service establishments since the industry was not yet regulated at all. OFWs, like me, had to go to the outlet to send money to our beneficiaries. Weekends were the best times to send money.

Japan started to relax its regulations only in 2010 when it started to grant remittance license to non-banks financial institutions. Many companies applied for remittance license and in a matter of just two years, there were over 30 companies who got their remittance license. The sudden increase in the number of remittance players in Japan has brought down the cost of sending money. Of course, the OFWs benefited a lot. But that has impacted the profitability of all the players.

In 2017, Smiles Mobile remittance started its operations. It was the first mobile remittance service in Japan. Many had predicted that the mobile remittance model would not succeed because the market was accustomed to traditional brick-and-mortar money transfer service. However, Smiles mobile remittance has started to become popular because of its convenient service, high exchange rate, affordable fees and its built-in loyalty program. It grew digitally and exponentially in a matter of three years.  In fact in just over a year, it broke even and it is now the number one mobile remittance service in Japan. No wonder in a matter of few more months, it has the ability to capture the majority of the market share in the remittance industry in Japan.

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