EdTech Trends Remittance

EdTech Trends: The Multi Billion Dollar Remittance Market

For developing nations like the Philippines, remittances from oversea workers play an important economic role. According to data from the country’ central bank, remittances made through bank transfers surged 6.1 percent to $10.404 billion in the first five months of 2014 from $9.809 billion in the same period in 2013.

And while this is already an astonishing amount in itself, we must not forget that still a large part of the population is unbanked or underbanked and therefore uses other ways of sending and receiving cash.

There are currently around 10 million Filipinos working overseas, sending money home to their families in order to support them. Ayannah founder and CEO Mikko Perez told TechCrunch that 8 million of those workers are unbanked or underbanked. Back home around 70 million Filipinos in the country have no access to regular banking, meaning that services like Western Union, Moneygram, Trans-fast, and iRemit handle most of the remittances sent to the Philippines from the U.S., Saudi Arabia, the United Arab Emirates, the UK, Singapore, Japan, and Hong Kong where most Filipino overseas workers are.

5% of remittances are spent on education – in 2013 around $1.3 billion

All in all the remittance market in the Philippines is estimated to be between $25 billion to $60 billion annually but currently this market is also very inefficient and costly for its users. A perfect industry for disruption.

Let’s take a look at two startups out of the Philippines that aim to make the remittance process more efficient. Of course, this opportunity is not limited to the Philippines only but all developing countries with a growing overseas workers group, may it be in South America or Africa.

Ayannah wants to become the Amazon of the next 4 billion


Ayannah does not necessarily want to compete with the aforementioned payment providers or replace them but aims to add services around remittances. This ranges from allowing overseas workers to easily pay for virtual goods, digital goods, gift certificates and so on but also paying for health and micro-insurance for family members back at home through a mobile commerce product called Sendah.

Ayannah also offers a B2B platform called Sendah Direct, enabling local stores and businesses to offer digital commerce and payment solutions with the goal to build the largest digital payment network in the Philippines and eventually becoming a major player in the space. The startup just announced a $1 million venture round, bringing the total funding raised to $4.5 million.



PhilSmile targets the 5% of remittances spent on education

PhilSmileGiving the next generation better opportunities through good education plays a major role in remittances; according to Tech in Asia about 5% of the $25 billion USD send home by Filipino workers was spent on education, which is around $1.3 billion USD.

The startup raised an undisclosed amount of seed funding from Eric Barbier, the founder and CEO of remittance service TransferTo. Through PhilSmile, overseas workers can pay directly for the school fees of their children or other family members, removing the need of a third party payment provider.

Payments can either be made for a whole year or in small weekly chunks. Through the investment, PhilSmile will be able to tab into TransferTo’s network of merchants who offer more than 200.000 points of sale in countries like Singapore, Hong Kong, the US, the UK and Dubai.


philsmile.com | Twitter | Facebook

Further Reading

  • Ayannah Raises $1M To Serve The Philippines’ Rapidly Growing Remittance Market | TechCrunch
  • OFW remittances hit $10 B in May | philSTAR
  • Filipinos living overseas now have a more convenient way to pay for their families’ education back home | Tech in Asia

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Kirsten Winkler is the founder and editor of EDUKWEST. She also writes about Social Media, Digital Society and Startups at KirstenWinkler.com.