A Dutch mobile first international payment network, TerraPay, incubated by Mahindra Comviva, the Gurgaon, Haryana based value added service provider for mobile operators, has acquired UK-based Pay2Global limited following regulatory approvals.
TerraPay has acquired 100% of Pay2Global for an undisclosed amount; Pay2Global is a digital international money transfer firm regulated by the Financial Conduct Authority (FCA) and therefore has passporting rights into the European Union – for as long as Britain remains a member of the EU, that is.
Research reveals that one in five of the world’s 50 million migrant workers – from whom Pay2Global derives the vast majority of its customers – live and work in Europe- which accounts for one quarter of all global remittance flows.
TerraPay say that the acquisition will help them instantly “scale its service footprint” into the 32 countries of the EEA”, and “expand the range and reach” of their money transfer products.
TerraPay are active in the Asian, Middle Eastern and African markets where they operate “global payment infrastructure for low-value cross-border transactions”, and believe the EEA markets will prove “highly complementary” to their money transfer networks elsewhere, adding “new source and receive locations and some of the world’s largest and fastest growing corridors.”
TerraPay’s founder, Ambar Sur, has commented; “we are now open for business in the UK and the EEA, among the world’s top markets for remittances.”
Whilst this is undoubtedly true; the UK is believed to be amongst the world’s top 10 countries for remittance amounts; the competition is fierce – and the numbers of people sending money abroad – and the amounts they send – are not well known.
According to a recent report from the Migration Observatory at the University of Oxford there is no official mechanism for recording remittances to and from the UK, and estimates vary from the World Bank’s figure of £1.5bn, to Eurostat, who suggest the figure is closer to £5.3bn, to the World Bank Bilateral Remittances Matrix, which puts the figure closer to £16.5bn!
Whatever the real figure, migrants sending money abroad from the UK certainly have options; from FinTech disruptors such as Transferwise, WorldRemit and Revolut, most with sizeable VC funded warchests to help them scale at speed, to more traditional services such as Western Union, or the 4 major high street banks.
TerraPay say they intend to re-brand Pay2Global as Terra Payment Services (UK) Ltd and plan to “commence services to key markets in Asia and Africa within the current financial year.”
According to data quoted in a TerraPay press release, “of the total 110 billion of remittances sent by migrants living in Europe, an approximate two thirds ($73bn) are sent to developing countries outside Europe, creating a sizeable addressable market for TerraPay.”
Behind TerraPay sits owner Mahindra Comviva, a company formed by a merger between Comviva and Tech Mahindra in 2012, who acquired a 51% stake in Comviva in 2012.
According to Wikipedia, Mahindra Comviva describes itself as “a value added services provider for mobile operators” with customers in 90 countries, mainly in Asia, the Middle East, Latin America and Africa. The company also has international offices in South Africa, Dubai, Singapore, Thailand, the UK and the USA.
Pay2Global’s website states that the company are a part of VFX Financial PLC, which is described as “one of the largest non-Bank Foreign Exchange firms in London executing over $8bn a year in transactions.”
The company operates online-only, through desktop, tablet, or mobile, and the service is available 24/7.
TerraPay is platform agnostic and supports standard open APIs for integration with any mobile wallet provider, as well as offering “services beyond principal core transaction, routing and processing functions and assumes end-to-end responsibility for regulatory compliance foreign exchange management and funds settlement”, according to its website.
““We already had partners in place and now that we have the UK licence (through the acquisition), it will just make the process smoother. We should be able to launch in 5-6 markets by September-end,” Ambar Sur has revealed.
This acquisition, it seems, was all about acquiring a UK banking licence, but given no figures were diosclosed, we can only speculate about how much that may have been worth to TerraPay, and ultimately, to Mahindra Comviva.