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Case study

Breaking down borders: How TransferGalaxy and Trustly are democratising international payments

Friday 31 May 2019 | 08:20 AM CET

TransferGalaxy is tackling an issue in today’s global economy — remittance — but developing a simple solution for sending money abroad is complicated. Trustly makes it simpler

Being far away from home when your loved ones need financial help is hard, but sending money to them shouldn’t have to be. That’s what TransferGalaxy believes.

It all started back in 2014 in the long queue at a local Western Union location. A few friends were frustrated that the process of sending money to their loved ones back home to Somalia took so long. On top of that, the associated fees were exorbitant. So the friends founded Swedish-based TransferGalaxy to democratise international payments by making remittances cheaper, safer, and smarter.

‘We are trying to change the remittance industry, from the traditional ways of visiting an agent to a fully digital solution where you only have to visit a website,’ says Ali Mohamed, co-founder and CTO of TransferGalaxy. Trustly has been an essential part of their journey, helping them bring their service to people across Europe.

Cross-border complications

TransferGalaxy is tackling an important issue in today’s global economy: remittance, which according to World Bank is USD 689 billion market, including USD 528 billion to developing countries. But developing a simple solution for sending money abroad is highly complicated.

In the increasingly competitive digital remittance space, customer acquisition is a challenge. People often shop around for the best rates. But at the end of the day, that’s not the most important factor, Ali says. ‘It doesn’t matter if we have the cheapest rates or the fastest transactions. None of this matters if our customers can’t make payments.’

When operating in so many different markets, catering to the localised preferences of customers is difficult but vital because it builds trust. ‘In some countries, people prefer to use card payments, but in other countries, they prefer to pay from their bank,’ suggests Ali. In Sweden, for example, 23% of people prefer to pay from their bank, but in Germany and the Netherlands, that number jumps to 45% and 61%, respectively. So not offering a bank payment option in those markets meant TransferGalaxy was turning away a lot of customers.

‘We had many customers that wanted to use our services but early on, when we just entered the market, we didn’t have a bank payment option. They were calling in to our support team asking for us to add a bank payment option and we realised that if we want to be in those markets, we needed to find a solution,’ affirms Ali. ‘Offering local payment solutions is a part of our whole digital strategy and has helped us gain our customers’ trust because they knew we were listening to them.’

But given that there are thousands of banks across Europe, individual integrations were out of the question for the growing company.

‘All the banks with one API’

TransferGalaxy turned to Trustly to streamline its bank integrations, and enable its customers in key markets to make instant payments with their preferred payment options. With Trustly, TransferGalaxy can accept payments from customers at more than 3,000 banks across Europe with just one simple integration. ‘Trustly provides all these banks with one API,’ says Ali, ‘and with Trustly’s solution, we could give our customers the option they wanted to use our services,’ Ali explains.

‘We can see that in Germany and the Netherlands, most of our customers use Trustly. If we didn’t have Trustly, they wouldn’t be able to make transactions,’ says Ali. Overall, about 40% of TransferGalaxy’s payments are through Trustly, and Ali expects this share will grow, not only because of the convenience of Trustly’s service, but due to wider market adoption as well. By 2027, instant bank payments are projected to overtake card payments in popularity online in Europe.

Ali has also noticed that when people want to transfer larger amounts — SEK 10,000 and above — they prefer to pay with Trustly over card. ‘Clearly, it’s a method people trust,’ he says.

Opening up to Europe

As a result of integrating with Trustly, TransferGalaxy has been able to open up its services to more customers across Sweden, Germany, Finland, Belgium, Norway, Denmark, the Netherlands, and the UK. Today the remittance company operates in 53 countries, accepting payments from 25 European countries, and offering payments to 28 EMEA countries, with plans to expand into new markets like Algeria, Bangladesh, and India soon.

TransferGalaxy has been able to decrease the number of support calls with customers requesting alternative payment methods that has freed up resources. This allows their support to focus on resolving technical issues, which is crucial in retaining customers in a competitive market.

It has also decreased fraud costs; about 90% of TransferGalaxy’s fraud cases come from cards, which have much higher fraud rates than online bank payments that are secured with two-factor authentication methods like Mobile BankID in Sweden.

Looking forward, the company is analysing new ways to simplify its cross-border payments service. One such solution is Trustly Direct Debit, which lets customers in Sweden digitally register a direct debit mandate to make all future payments with one click.

With simplified cross-border payment solutions, Trustly is helping TransferGalaxy to make the world a bit more connected, bringing people closer to the ones they love.

About Trustly

Trustly is a fintech company that makes online banking payments fast, simple, and secure. We cover 29 European countries and our payment solutions attract global merchants in ecommerce, travel, financial services, and more. Trustly is a licensed Payment Institution under the supervision of the Swedish Financial Supervisory Authority.

About TransferGalaxy

The Swedish fintech TransferGalaxy offers a platform for cross-border digital money transfers, sending money from 25 countries within Europe to 28 countries around the world. By utilising innovative digital payment solutions, TransferGalaxy aims to democratise international payments making them cheaper, safer, and smarter.

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