Money transfer firm Zooz raises $24 million

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Zooz, an Israel-based payments platform that works to facilitate cross-border payment acceptance for merchants, announced the close of a $24 million Series C funding round earlier this week.

That brings its total funding to $40.5 million raised over four rounds. Zooz helps merchants maximize their performance by providing a simple platform on which developers can integrate multiple acquirers, digital wallets, and fraud management tools in order to limit the number of false credit card declines, especially among merchants that process international transactions on a regular basis, according to TechCrunch.

Zooz plans to use the funding to accelerate growth, develop new products, launch in new markets, and increase its presence in existing markets. And the company will add sales and tech teams in Berlin and San Francisco to give it a more immediate presence in what it sees as potentially lucrative markets.

It’s likely the company will benefit as more merchants develop an online and mobile commerce presence in an effort to capitalize on these high-growth channels.

Every year, migrants send hundreds of billions of dollars worth of remittances back to friends and family in their home country. And there’s a massive industry that facilitates these payments — and has for more than a century.

The legacy remittance industry has been long dominated by cash, which requires physical locations where customers can hand over or pick up money. Building out those retail networks is a huge investment. It’s left just a few players, called Money Transfer Operators (MTOs), controlling a bulk of the industry.

But these companies’ comfortable hold on the industry is now being challenged by digital remittance startups. Digital-first remittance companies are competing on fees and usability, and capitalizing on the way people’s expectations have changed with the advent of digital and mobile channels.

Evan Bakker, research analyst for BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on digital remittance that sizes the total remittance market, company-specific market share, digital’s market share, and digital’s growth at major remittance firms. It also assesses how disruptive digital startups have been by comparing their fees with market leaders, and by juxtaposing their business models with those of legacy companies.

BII

Here are some of the key takeaways:

• Digital’s share of the global remittance industry is still fairly small at 6% — but growth is extremely fast at digital-first startups and legacy companies.
• Fourteen year-old Xoom makes more revenue from electronic channels than 75 year-old MoneyGram, the second-largest remittance company in the world.
• Startups are undercutting incumbents’ fees in certain corridors; however, legacy firms have matched prices in many major corridors.
• Legacy firms’ businesses are already responding to the threats posed by digital by lowering fees and adjusting business strategies. However, they face lower margins if they continue to compete with startups on pricing.

In full, the report:

• Sizes the remittance market and calculates major remittance companies’ market share.
• Estimates digital’s share of the market vs. cash.
• Quantifies digital’s impact at remittance startups and legacy firms.
• Breaks down the business models employed by each type of remittance company, and determines which ones are in a better position for growth.
• Compares transfer fees in various corridors to assess the competitiveness of each firm.
• Explores other platforms that could completely upend the industry from the outside.
• Determines how legacy remittance companies will fare in the digital age – the answer may surprise you.

To get your copy of this invaluable guide, choose one of these options:

1. Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> START A MEMBERSHIP
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The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of digital remittance.

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