A few years ago, comparison sites were integral to the acquisition of money transfers customers, but is this still true today? Search results data suggests not. Moreover, this behaviour shift suggests the sector is changing.

Generally, the money transfers space appears to be doing well, with our own report last week showing that all publicly traded remittances players are now seeing positive quarterly growth for the first time since 2021. However, the use of comparison sites no longer seems to be playing as important a role in this as it once did.

Anecdotally, we had been hearing that consumers were using money transfer comparison websites less than they had in the past, and our analysis of data from Google Trends reflects this. It shows a steady decline over the last five years, with August 2023 searches 36% lower than in September 2018.

There are likely to be several reasons for this:

1) Changing behaviour of users. Back in 2017, the UK government’s Competition & Markets Authority found that those aged 35-44 were most likely to use such websites for any purpose, while those aged 16-24 were the least likely to, tied with those aged 65+. The search data suggests that those younger consumers have not increased their usage with age, reducing the significance of comparison sites as younger groups age and become a more powerful consumer segment.

2) Better products. Five years ago, many leading players didn’t have a meaningful digital presence. Now, virtually all the leading players, both digital and incumbents, have offerings that nearly all meet a baseline of a good user experience and a good price. Companies are holding onto their customers as their products have improved.

3) More focused marketing spend. We are past the heady years of large marketing spends literally giving away the products. Some first-time user promotions remain, but nothing to the level that used to incentivise switching.

All this suggests that the overall sector is maturing, products are improving and the need for customers to keep switching is only likely to continue to decline.

How are money transfer players competing on price?

Lucy Ingham

LinkedIn

Lucy is Head of Content & Editor-in-Chief at FXC Intelligence, overseeing all content and taking deep dives into the trends and data driving changes in payments. Before joining FXC Intelligence, Lucy worked as a technology journalist and editor, interviewing CEOs and major names across enterprise technology, including fintech. She has an MSc in Development Anthropology from Durham University.