western union

Amazon, Western Union debut PayCode to sell goods in emerging markets and let shoppers pay in cash

Posted by | alibaba, Amazon, Asia, developing markets, eCommerce, emerging markets, Finance, Mobile, payments, qr code, TC, western union | No Comments

While Amazon has been methodical (read: a little slow) in launching local versions of its site for various global markets, it has now embarked on a secondary track to snag more business outside the 14 countries where it has built out full operations.

Amazon has partnered with Western Union to set up a service called PayCode, which lets people shop and pay for Amazon items using local currencies that would not have been accepted on the site before, starting with services in 10 countries: Chile, Columbia, Hong Kong, Indonesia, Kenya, Malaysia, Peru, Philippines, Taiwan and Thailand.

Specifically, shoppers in these markets will now be able to go into Western Union outposts and pay for their Amazon purchases in cash, which also means that payment cards or other virtual payment methods will also not be required to buy from Amazon — one of the barriers to expanding the service up to now into more emerging economies, where card and bank account penetration is much lower than in developed markets like the U.S. and Europe.

“Amazon is committed to enabling customers anywhere in the world to shop on Amazon.com, and a big part of that is to allow customers to pay for their cross-border online purchases in a way that is most convenient for them,” said Ben Volk, director, Payment Acceptance and Experience at Amazon, in a statement. “Amazon PayCode leverages the reach of Western Union to make cross-border online shopping a reliable and convenient experience for customers who do not have access to international credit cards, or prefer to pay in cash.”

In terms of what they will be able to buy, people can shop across the breadth of the Amazon marketplace, but Amazon notes that they will only be able to use PayCode if it’s offered as an option at checkout (which will only happen in the markets where PayCode is supported); if the item that is chosen is “export eligible,” and if the item’s value “exceeds the maximum value allowed for use on this payment type” — although Amazon doesn’t appear to specify what that maximum value is. Once you complete the purchase online (or possibly more likely, on mobile), you get a “PayCode” QR code that you will have 48 hours to take to a Western Union to pay for the goods; otherwise your order gets cancelled.

The deal between Amazon and Western Union was initially announced last October, with very little detail and fanfare. The PayCode name then appeared to leak out a month later around what appeared to be a test in India (where it has not launched… yet). Today was the first time that the companies unveiled the first launch countries.

PayCode is a significant advance for Amazon as it seeks to step up to the next level of being a global e-commerce powerhouse to compete against the likes of Alibaba.

The latter company has made a lot of inroads to work in a wider array of markets beyond its home base of China, specifically tapping into a long tail of supply from its home market and demand for those goods abroad. Alibaba is also taking care of business when it comes to making more seamless transactions related to those trades. Just today, its financial services affiliate Ant Financial announced that it would acquire U.K.’s WorldFirst, which provides foreign money transfer for businesses and individuals, for a price that we heard from sources was in the region of $700 million.

Amazon currently operates 15 Amazon websites globally: in the U.S., U.K., Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Netherlands, Spain and Turkey. (It appears also to have a Prime-only site in Singapore.) Up to now, these would have been the only countries where Amazon would offer goods in local currencies.

Adding a new tranche of countries using PayCode will potentially massively expand how many people can shop on Amazon without Amazon going through the steps of setting up full-fledged operations in those countries to serve those consumers and sellers. (Or, this being Amazon, this would be a key way for the company to start testing the waters to figure out which market might do best with a full-fledged store.) Over time, you might imagine that Amazon might extend PayCode to markets where it has sites, too, to give shoppers more flexibility in how they pay for goods for themselves or that they are buying for others.

It’s a big market opportunity. Amazon cites estimates from Forrester Research that say cross-border shopping will represent 20 percent of e-commerce by 2022, accounting for $630 billion.

For Western Union, this is a potentially big partnership, too.

Today, PayCode allows people to use Western Union to act as a physical pay station for their Amazon goods, giving Western Union a small cut on those transactions. But you might imagine how this could evolve over time, where remittances sent from family members abroad via Western Union — a very common use of remittance networks — might immediately get redeemed to cover purchases on Amazon.

Similarly, Western Union is working closer with MPesa, the African mobile wallet service that lets people essentially use their phone top-up account as a payment account, and you could imagine how this too could get incorporated into the PayCode experience to facilitate buying and paying on devices, without having to go into Western Union shops and use actual cash.

“We’re helping to unlock access to Amazon.com for customers who need and want items that can only be found online in many parts of the world,” said Khalid Fellahi, SVP and General Manager of Western Union Digital, in a statement. “This is a great example of two global brands innovating and collaborating to bring customers more convenience and choice. In a world where cross-border buyers and sellers are often located on different continents and in completely different financial ecosystems, our platform is ideally suited to solving the complexity of collecting local currency and converting it into whatever currency merchants need on the other end.”

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With a $10 million round, Nigeria’s Paga plans global expansion

Posted by | africa, alipay, Android, Bank, bank transfers, california, cellulant, ceo, Column, e-commerce, economy, ethiopia, Finance, kenya, M-Pesa, Mexico, mobile devices, mobile payment, money, Nigeria, Omidyar Network, online payments, p2p, PayPal, Philippines, Safaricom, San Francisco, Spotify, Sweden, Uber, vodafone, western union | No Comments
Jake Bright
Contributor

Jake Bright is a writer and author in New York City. He is co-author of The Next Africa.

Nigerian digital payments startup Paga is gearing up for an international expansion with $10 million in funding let by the Global Innovation Fund. 

The company is planning to release its payments product in Ethiopia, Mexico, and the Philippines—CEO Tayo Oviosu told TechCrunch at Disrupt San Francisco.

Paga looks to go head to head with regional and global payment players, such as PayPal, Alipay, and Safaricom’s M-Pesa, according to Oviosu.

“We are not only in a position to compete with them, we’re going beyond them,” he  said of Kenya’s M-Pesa mobile money product. “Our goal is to build a global payment ecosystem across many emerging markets.”

Founded in 2012, Paga has created a multi-channel network and platform to transfer money, pay-bills, and buy things digitally that’s already serving 9 million customers in Nigeria—including 6000 businesses. All of whom can drop into one of Paga’s 17,167 agents or transfer funds from one of Paga’s mobile apps.

Paga products work on iOS, Android, and basic USSD phones using a star, hashtag option. The company has remittance partnerships with the likes of Western Union and Moneytrans and allows for third-party integration of its app.

Paga has also built out considerable scale in home market Nigeria—which boasts the dual distinction as Africa’s most populous nation and largest economy.

Since inception, the startup has processed 57 million transactions worth $3.6 billion, according to Oviosu.

That’s no small feat given the country straddles the challenges and opportunities of growing digital payments. Only recently did Nigeria’s mobile and internet penetration break 50 percent and 40 percent of the country’s 196 million remain unbanked.

To bring more of Nigeria’s masses onto digital commerce, Paga recently launched a new money transfer-app that further simplifies the P2P payment process from mobile devices.

For nearly a decade, Kenya’s M-Pesa—which has 20 million active users and operates abroad—has dominated discussions of mobile money in Africa.

Paga and a growing field of operators are diversifying the continent’s payment playing field.

Fintech company Cellulant raised $47 million in 2019 on its business of processing $350 million in payment transactions across 33 African countries.

In Nigeria, payment infrastructure company Interswitch has expanded across borders and is pursuing an IPO. And Nigerian payment gateway startups Paystack and Flutterwave have digitized volumes of B2B transactions while gaining global investment.

So why does Paga—a Nigerian payments company—believe it can expand its digital payments business abroad?

“Why not us?,” said CEO Oviosu. “People sit in California and listen to Spotify that was developed in Sweden. And Uber started somewhere before going to different countries and figuring out local markets,” he added.

“The team behind this business has worked globally for some of the top tech names. This platform can stand shoulder to shoulder with any payments company built somewhere else,” he said.

On that platform, Oviosu underscores it has positioned itself as a partner, not a rival, to traditional banks. “Our ecosystem is not built to compete with you, it’s actually complimentary to you,” he said of the company’s positioning to big banks—enabling Paga to partner with seven banks in Nigeria.

Paga also sees potential to adapt its model to other regulatory and consumer environments. “We’ve built an infrastructure that rides across all mobile networks,” said Oviosu. “We’re not trying to be a bank. Paga wants to work with the banks and financial institutions to enable a billion people to access and use money,” he said.

As part of the $10 million round (which brings Paga’s total funding up to $35 million), Global Innovation Partners will take a board seat. Other round participants include Goodwell, Adlevo Capital, Omidyar Network, and Unreasonable Capital.

Paga will use the Series B2 to grow its core development team of 25 engineers across countries and continents. It will also continue its due diligence on global expansion—though no hard dates have been announced.

On revenues, Paga makes money on merchant payments, bank to bank transfers, and selling airtime and data. “As we roll out other services, we will build a model where we will make money on savings and lending,” said the company’s CEO.

As for profitability, Paga does not release financials, but reached profitability in 2018, according to Oviosu—something that was confirmed in the due diligence process with round investors.

On the possibility of beating Interswitch (or another venerable startup) to become Africa’s first big tech IPO, Oviosu plays that down. “For the next 3-5 years I see us staying private,” he said.

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Western Union Brings Money Transfer And Its Tricky Fees To Chat Apps

Posted by | Apps, eCommerce, Mobile, remittance, Social, Startups, TC, Viber, western union | No Comments

giphy Remittance has always been a shady business. Migrant workers need to send money they earn home to their families, but get hit with fine print fees so less cash comes out the other side than they might assume. Remittance companies earn extra by keeping the margin between their own made up exchange rate and the real one.
Western Union is the best known remittance company, with 500,000… Read More

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