Crafting A Money Transfers Strategy: Guidance For Pro-Poor Financial Service Providers (Occasional Paper No. 10)

This paper explores the ways in which financial service providers (FSP) can develop pro-poor money transfer strategies. The paper is divided into three sections:

• The first section gives an overview of:
  • Global money transfers;
  • Size and structure of the industry;
  • Differences between its different segments.
• The second section describes:
  • The main types of transmission channels used for funds transfer;
  • Types of providers;
  • Partnerships between these providers;
  • New customer interfaces being used to make money transfers cheaper and more convenient for clients.
• The final section explores:
  • The manner in which a pro-poor FSP can build a money transfers strategy;
  • Factors for consideration, such as client preferences, regulation, competition, institutional capacity, financial analysis, and marketing.

The paper concludes that:

• FSPs have a social as well as a financial interest in money transfers;
• Greater transparency will be required in operations as the scale of operation increases;
• Before launching a money transfer product, FSPs should carefully consider factors like client preferences, competition and regulation;
• Alliances that allow FSPs to offer money transfer services may be the best approach for new market entrants;
• New customer interfaces that reduce the cost of providing access to clients are multiplying the opportunities for FSPs.

The paper also states that satisfying the demand for diverse financial services is crucial to building financial systems that truly serve the poor.