Were you wondering about the history of the international money transfer industry? When did people start to send money abroad electronically? When was Western Union established and when did it turn into electric fund transfer? Were you wondering when did the first money transfer company got listed on the stock exchange (hint: very long time ago)? When did the British regulator come into play to regulate banking actives and when did the FSA become the FCA? How about when was World First and Currencies Direct were established? When did Transferwise raise $58m dollars in one round and when did World Remit raise $100m?
We have all of that and more on the infographic below:
Money Transfer History Timeline – Top 50 Events
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|1851||Western Union is established and dominated the telegraph industry|
|1871||Western Union started its telegraph network-based money transfer services|
|1884||Western Union becomes one of the first companies to be ever listed on the NYSE|
|1940||MoneyGram is established|
|1962||Moneycorp is established as Travelers Express Co. Inc.|
|1973||SWIFT was founded|
|1979||Moneycorp Stated Transferring Money Abroad|
|1985||FSA was founded (named SIB)|
|1996||Currencies Direct is established|
|1998||PayPal was founded under the name Confinity (will alter the way international money transfers are completed, normalizing the online platform)|
|1998||MoneyGram International is formed|
|1998||OzForex (OFX) is founded in Australia|
|1999||Currencies Direct opened its first EU branch in Spain|
|2000||PayPal was merged with x.com of Elon Musk|
|2002||eBay buys PayPal (officially opening the gateway for online money transfers to be prevalent in everyday lives)|
|2003||SWIFT IBAN Registry|
|2004||World First is established|
|2004||TorFX is established|
|2004||Currencies Direct opened their office in South Africa|
|2005||OFX is established|
|2006||Western Union discontinues its telegram service|
|2007||Currencies Direct opened their office in the USA|
|2008||World First opened their office in Australia|
|2010||The Collapse of The Crown Currency Foreign Exchange Business|
|2011||TransferWise is established|
|2011||Western Union Buys Travelex|
|2012||World First opened their office in the US|
|2012||Azimo is established|
|2013||FCA was is established and FSA was abolished|
|2013||World First opened their office in Singapore|
|2013||OFX is listed on the Australian Securities Exchange under symbol OFX|
|2014||Euronet Worldwide Acquires HiFX|
|2014||World First opened their office in Hong Kong|
|2015||Euronet Worldwide Acquires XE|
|2015||Palamon Capital Partners and Corsair Capital acquires Currencies Direct|
|2015||Transferwise gets $58m in a single funding round led by
|2015||World Remit raises $100m in a single funding round led by Accel Partners, with a valuation of $500m|
|2016||Global Reach Partners Purchases FC Exchange|
|2017||Ant Financial buys Moneygram|
|2017||TransferWise reports GBP 1bn in monthly revenues|
|2017||MoneyCorp buys Commonwealth Foreign Exchange|
|2017||Cambridge FX is bought by Fleector|
|2017||OFX Brand Consolidated|
|2018||Global Reach Partners and FC Exchange merge into Global Reach Group|
|2018||Transferwise reports transferring £2bm monthly|
|2019||WorldFirst exiting the USA market|
|2019||Ant Financial buys WorldFirst for $700m|
The Money Transfer Timeline: History in Motion
Up until recently, only traditional banks were capable of completing international money transfers. These electronic overseas transfers can be dated back about 150 years. Originally, transferring money abroad was very intently regulated. There were many laws and restrictions that made the process tiresome and difficult. For this reason, only banks offered money transfer services. And even then, most of them only offered domestic transfers. In many cases, some would only transfer to another account within the same bank. For a long time, this worked. People lived lives that were essentially localized with little to no exposure to the international world. However, this all changed at the onset of the industrial age.
Money Transfers: The Early Years
Wire transfers became increasingly popular in the 19th century, as the age of globalized industrialization started to boom. As more and more people started working with fellow contractors and innovators overseas, it became necessary to globalize banking – including how people were able to send and receive funds internationally on an individual basis, not just as a large company or government entity. It’s important to note that this had never happened before. The kinds of work that people were doing, the sheer volume of payments being made domestically, and the sudden capability to work and travel internationally were essentially unheard of. This was completely unchartered territory. And, of course, when you’re navigating uncharted territory, you tend to need financing to make it all happen.
This is where banks started stepping up their money transfer game. Their service offerings expanded, but they couldn’t navigate around the strict regulations that they had always operated under. And then, just as the need arose, so did the solution. Money transfer companies started steadily cropping up to meet the rise in demand. One of the first money transfer companies was, of course, Western Union.
Western Union Makes Transfers Popular
Western Union was a pioneer in many different aspects. Their founders had a unique vision, unlike other financial institutions that had cropped up until that point. Their current vision statement says, “Western Union’s vision is to be a global leader in cross-currency, cross-border money movement & payment services, continuing to meet consumer and business needs as they develop.” This was true then, and it’s true now. Western Union has always been willing to evolve with the times and continually work to meet the newly arising needs of the public. They were the first true users of the telegraph and created the first international telegraph line. They also invented the first stock ticker in 1869.
Finally, after many years of the banks continue to dominate the money transfer industry, Western Union decided to get involved. In 1987, a large investment in Western Union was made by a Bennett S Lebow. Lebow appointed Robert J Amman as the President and CEO of the company. Amman moved forward with an initiative to create a large part of Western Union dedicated completely to money transfer. It was then that the company started to turn away from their established presence as a communication business to a money transfer organization. Western Union is still a highly successful international money transfer giant. However, their success only opened the door for many other companies to crop up in their wake as the demand for these services grew.
PayPal Revolutionizes Transfers by Normalizing an Online Platform
Then, in 1998, another game-changing company was established – PayPal. PayPal was, essentially, the first online money transfer company to step into the spotlight. They made online money transfer possible and at a fraction of the cost that larger money transfer companies and banks were charging. Initially, they were established to be a ”secure payments ecosystem.” In 2002, PayPal was acquired by eBay. This opened the doors for the platform to become a more secure, more eCommerce focused payments system with great capabilities. The system was now widely recognized and used globally. PayPal’s sudden popularity gain normalized online money transfers in a way that hadn’t been done before. However, at this time online money transfer was still primarily used for individual transfers and ecommerce. There wasn’t a huge spike in the different fintech money transfer offerings available to the public until much more recently.
The Money Transfer Industry Today
Today, the fintech industry and, specifically, the money transfer sector is booming. The world has become an entirely globalized place, where people’s careers, travel, and general way of life is much more nomadic than it ever has been before. There are now opportunities for people to move abroad, study overseas, open businesses that do work internationally with multiple headquarters in multiple countries, and more. We rely solely on money transfers to keep our way of life moving across borders. Luckily, with the ever-improving technology at our disposal, options for international currency transfer have become more and more available and advanced as we have a greater demand for the service.
In 2008, there was a colossal economic crash that created shockwaves in global markets. Some took it harder than others, but the takeaway remained clear: how we dealt with finances needed to be rethought. This, of course, extended to the money transfer industry. People required (and wanted to design) companies that were much more accessible. The lack of transparency that big banks and financial institutions practised so obviously led to their downfall and entrepreneurs took note. As a result, a variety of online-only banks and money transfer companies started to crop up.
Businesses like TransferWise and CurrencyFair became the norm in the money transfer world. They operate with clearly communicated exchange rates and user-friendly interfaces that make transferring money internationally easy. What’s even better is that most of these companies charge low or no fees. In comparison to banks, who often charge a large percentage or a high flat-rate per international transfer, this is a revolutionary concept. These new companies can operate with these low and no-fee models because they aren’t tied down by the same strict regulations that banks are. Additionally, they don’t have the same expenses that large brick and mortar banks and financial institutions have, and they can pass those savings on to the consumer.
Online money transfer companies are also able to charge low or no fees because of how their system works. Rather than actually wiring your money internationally or sending it abroad, they take the sum you’re looking to transfer from Country Y to Country X and match it with somebody else who’s looking to transfer money from Country X to Country Y. That way your funds are never truly leaving their country of origin, and everybody gets the transfer they’re looking for. This saves on hefty international money wiring fees, which again, the companies are able to translate into lower pricing models for their customers.
All of that being said, online money transfer companies are so much more than just transfer systems. As fintech continues to advance, so do the offerings of these companies. Some online platforms cater specifically to migrant workers looking to send money home to loved ones. Others cater to high profile forex traders. While others still cater to international businesses who need to make payments and accept payments from the same online, international account. Their tools for both making transfers possible across borders and honing in on the best possible exchange rates for traders and everyday transfer-makers alike is astounding. While cybersecurity continues to be a concern, most online-only companies are capable of keeping pace with the best security measures to ensure the safety of their customers.
The future of the money transfer industry is exciting. With developers looking to make online transfers abroad more accessible, the use of mobile applications and online deposits to make overseas transfers more accessible for the user are becoming more prevalent. It will be incredibly interesting to see what the future holds for the industry, as it will no doubt lead to a more accessible financial world for all and a more globalized connection between individuals across nations.
We hope you enjoyed reading the International Money Transfer History piece and welcome you to read more related material.