According to the World Bank peer-to-peer money transfer services handle $400bn of cash transfers every year. Given that these services, dominated by big players such as Western Union can charge over 10% commission the sector is ripe for disruption.
Enter a new generation of online financial service startups such as Azimo ($460K funding Jan 2013) that aim to cut the cost of sending money and make the customer experience smoother using native mobile apps and harnessing digital connections of Facebook.
A UK startup competitor to TransferWise and US counterpart Dwolla, Azimo makes signing up to its service easier by inviting them to do so their Facebook account. They can then use Facebook’s messaging service to send money to Facebook friends; all for a fee of 1% – maximum (GBP15 ($23)). Unlike Dwolla, says the FT, Azimo offers international transfers; recipients can route incoming funds to a bank account or to 150,000 payout locations around the globe.
As we put together a conference presentation for next month on how to make social media pay in the financial services sector, a theme is emerging; social as a service.
Sure, using social media for marketing and sales (customer acquisition and retention) can work, but real opportunity appears to lie in using social media (connections and functionality) as a service, in order to offer customers a better experience and service. Social as a service. That’s the future of social in financial services, and social commerce.