There has grown to be an opportunity to disrupt a huge market where technology has yet to have impact, which is now drawing investors into the market for international remittance, otherwise known as helping immigrants send money back to their native countries.
That is why one company, Boom Financial, has taken on a $17 million round to grow its operations as the remittance of funds, from one country to another, is a costly procedure. The Wall Street Journal recently reported that mobile banking company m-Via has raised $17M in funding and changed its name to Boom Financial.
Boom provides a cross-border online financial platform for people without bank accounts. The company serves immigrant families with the ability to save, share and spend their money globally, which is very important for immigrants with families abroad. Boom’s mobile money service eliminates the need for traditional cash wire transfers by allowing members to use phones to make low-cost, bank-grade payments using text messaging. Users can make purchases and withdrawals at Boom vendors and ATMs. They simply load money to their account at participating retail locations, a text the amount of money to transfer and the phone number of the recipient.
Since there are more than 60 million people in the U.S. without have bank accounts, but with mobile phones, there is a huge market for this service. There is also a demand among this segment of the population for a method in sending money across borders.
The sending of funds home from, such as the U.S, to Haiti, or Mexico, is often the conduit of lifeblood that flows from employed family members to hungry youths and aged abroad. So, the ability to lower the cost of transactions could have an impact on millions who may live in difficult conditions.
“Boom Financial was founded to provide our customers, who are often used to a feeling of helplessness due to high fees, fear of robbery, and extreme inconvenience, bordering on hardship, gain a feeling of control over their finances,” Boom Financial CEO Bill Barhydt (News - Alert) told the Wall Street Journal.
According to the Wall Street Journal, Boom Financial’s plan includes:
- Anyone in the U.S. can sign up for an account that can send money to mobile devices in select foreign countries in Central and Latin America.
- They pay a yearly rate for the privilege at $25 per annum
- Recipients of these funds can withdraw cash at mobile withdrawal points (non-ATMs) in rural areas, and ATMs in more populated regions.
- Boom takes no cut of these transfers.
- Of debit card transactions, the company make take a small cut, as Square might, for example.
- Any customer withdrawing funds with their phone in a rural area will pay a small fee.
In 2011, Boom collaborated with the U.S. State Department to create the International Diaspora Engagement Alliance to support communities in the U.S., underscoring the company’s commitment to making life easier for immigrant communities. Boom raised its initial investment of $5 million in 2010. This second round brings the funding to $30 million led by Digicel (News - Alert) Group, a mobile operator with an international presence in the Caribbean, Central America, and the South Pacific. Boom will channel the investment towards expanding its product team in the U.S., as well as increasing its sales and distribution in the US, Latin American, and Caribbean.
Boom recently sat down with TMCnet at the Editorial Open House in San Jose to discuss how the company saves money on cross-border transactions.
Bill Barhydt, president and CEO of Boom, told TMCnet, “ Users are saving a fortune on fees, the money is much safer, family members abroad actually receive the funds on their mobile phone in real-time, so they don’t have to worry about being robbed or traveling hours to pick up cash remittances from the U.S.”
Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2012, taking place Oct. 2-5, in Austin, TX. Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.
Edited by Rachel Ramsey