Asia, with its large migrant population, promises a huge growth market for US payment service firms, but for pure-play companies like Western Union and MoneyGram International, that's not the end. They are busy looking for newer avenues ranging from domestic services to mobile transfers as they try and win more customer confidence, even though informal channels rampant in the region pose a big challenge.
That Asian countries are major recipients of remittances is no secret, but apart from inter-continental transfers, the domestic market within Asia, especially in the south-east, is also opening up as more people cross borders within the region for education and in search of jobs.
"We are increasingly seeing growth in outbound transactions within Asia-Pacific (APAC) as more Asians migrate within Asia," said Drina Yue, Western Union's senior vice president for Asia Pacific.
Western Union has already launched domestic transfer operations in the Philippines and Indonesia, while MoneyGram is looking at the region more closely. These companies also see opportunity in Malaysia - the largest sending market in Asia - home to a big population of Indonesians, Vietnamese and Bangladeshis.
Countries like India and China have been the top remittance receivers for some years now, but government regulations forbid the companies from operating on a domestic basis. However, MoneyGram CEO Pamela Patsley said there is a great opportunity in the money transfer market within Indian states.