How fast and affordable remittance services are supporting Hong Kong’s migrant communities

Despite the city’s youthful, mobile-savvy demographics and high internet penetration, digital payment solutions, such as wallet to bank transfers, have not always been highly popular in Hong Kong. With the introduction of the Hong Kong Monetary Authority’s (HKMA) Faster Payment System (FPS) and the rise of Chinese giants in the city, however, things are fast changing.

In particular, the entrance of Alipay and WeChat Pay HK into the market is challenging the long-held dominance of the local financial services firm, Octopus.

Though traditional financial institutions such as HSBC continue to lead the market, digital-first mobile giants have been differentiating themselves through flexible and seamless integration with other platforms for customers to shop, book hotels and holidays, order car rides and food, and so on.

Mobile apps offering remittance and wallet to bank transfer services have become highly popular among many Indonesian and Filipino workers in the city, many of whom are part of significant demographics driving the growth of today’s remittance markets.

For example, WeChat Pay HK has seen immense success in the city state over the last couple of years, thanks in part to HKMA’s issuance of new “virtual licenses” to digital-only banks, including WeChat Pay HK’s parent company, Tencent.

The Hong Kong-version of the wildly popular WeChatPay app was launched in 2017, and has since been using the ubiquity of the original chat app to grow its user base. In the two years since its launch, WeChat Pay HK has been steadily gaining ground in the city state through a number of initiatives such as opening up the mainland China’s retail frontier to Hong Kong shoppers, and partnering up with cross-border payment hubs to offer fast and affordable remittance services.

Demographics driving growth

There’s little mystery as to why many mobile apps in Hong Kong would look to tap into the lucrative global remittance market.

Since the 1970s, primarily Filipino migrant workers flooded the megacity during a period of rapid economic growth. They were soon joined by workers from Indonesia, Thailand and Sri Lanka, who began entering the country from the 1990s.

Today, Hong Kong has one of the largest bases of migrant workers in the region, numbering in at 380,000 workers. Foreign domestic workers alone have been calculated to contribute US$12.7 billion to Hong Kong’s economy, making up nearly 4 percent of its total GDP.

Conversely, the Filipino labor diaspora in particular has translated to 2.3 million overseas workers, 6.3% of which have decided to pursue employment in Hong Kong, according to the Philippine Statistics Authority. This means of the 235.9 billion PHP (US$4.55 billion) in remittances recorded between April and September of 2018 that was funneled into the Philippines from overseas workers, a sizeable chunk came from Hong Kong.

Between the two states alone, so much money has darted back and forth given the context and the nature of the relationship between the two countries. This does not account cross-border money transfer between Hong Kong and Indonesia, Thailand and Sri Lanka, which have also contributed largely to the country’s migrant economy.

The advent of cross-border payment

None of this happened overnight. While much of the support that the country has been getting is anchored on state-sponsored efforts through HKMA, a large contributor to the phenomenon can also be credited to private initiatives spearheaded by tech startups in the ecosystem.

Enter cross-border payment specialists like Tranglo, experts that have enabled mobile giants to provide remittance services with ease.

Together they aim to meet the rising demand for fast and secure cross-border payment, particularly among Filipino and Indonesian migrant workers.

While mobile apps with remittance functions are not designed only for Filipino and Indonesian migrant workers, their services often contain easy-to-use interface and special features showing that these companies keep them in mind. Access is a key component: users should be able to top up the wallet easily, among other features that render the service completely accessible to the everyday user.

Mobile remittance apps have also addressed the banking problems inherent to migrant workers’ home countries: both the Philippines and Indonesia have huge unbanked populations, which makes access to traditional remittance services difficult due to poor financial infrastructure. These digital apps attempt to circumvent those problems for workers sending money home by providing “cash pickup” options.

Tranglo supports this entire framework through its API platform, which undergirds the entire systems of such mobile apps, and its wide network of partners. It’s because Tranglo has access to literally thousands of payout partners that mobile remittance services are able to provide their users with easy cash pick-up options and secure payment solutions.

 

Who is Tranglo and what do they do?

Since 2008, Tranglo has been building bridges as a global pioneer in cross-border payment solutions on the foundations of its sprawling web of connections, which includes banks, retailers and network operators. Headquartered in Kuala Lumpur, Malaysia, Tranglo’s footprint today spans offices in Singapore, London, Dubai and Jakarta, from which it offers a variety of solutions for business and mobile payments, and foreign remittance services.

It’s in the area of foreign remittance that Tranglo has really made its name. For more than a decade now, the company has been exploring the possibilities of how remittance solutions can positively benefit its business partners and their customers. In partnerships with telcos such as REDtone and SingTel, Tranglo has spearheaded innovations such as “self service remittance” and digital gifting solutions.

These innovations are capitalising on a particular moment during which immigration trends in Asia are on the rise. Despite traditional immigration hubs such as the US and Europe turning their backs on economic migrants, Asia’s largest economic hubs continue to attract workers from all around the region.

As a result, the global remittance industry continues to make big bucks: the global digital remittance market is expected to reach US$ 8.61 billion in value by 2025, driven by the continual rise of immigration rates of workers from developing to developed nations, a demographic which remains highly mobile and price-sensitive.

For many immigrants, the lure of affordable digital remittance services is hard to ignore: financial services businesses such as WeChat Pay HK are quickly overtaking legacy incumbents — think MoneyGram or Western Union — to claim more of the market share of the younger, digitally-savvy customer bases of Asia Pacific.

Empowering lives through quality remittance services

It’s hard to downplay the importance of remittance services for global migrant communities. Today, an estimated 258 million people are living and working outside their home countries, directly supporting as many as 800 million individuals. In fact, remitted money has been shown to be crucial a national development tool, since it’s significantly more stable than private debt or international aid. This only drives home how important it is that the services migrant workers are accessing are secure, affordable and reliable.

For many years now, Tranglo has been actively working to build a more equitable world where access to financial services is available to everyone. Their partnerships with remittance players in Hong Kong and elsewhere offer more options for migrant workers, though it is only one part of their overall mission. But you can bet it certainly isn’t the last.

Ultimately, initiatives like the ones being spearheaded by Tranglo empower the lives of many migrant families around the world. When gaps in cross-border remittance are bridged, families are inadvertently bridged together as well—making sure that the sacrifices of those who pursue work in distant lands do not go to waste.

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