Fintech revolution in transition countries – remittances and mobile money

Abstract

Transition countries experienced massive emigration after the fall of the Soviet Union. Many of them currently rely on remittances from abroad. The number of Remittances Services Providers is constantly growing, some studies speak about the “uberisation” of the remittances market. The paper focuses on six case countries: Armenia, Georgia, Moldova, Kyrgyzstan, Tajikistan and Ukraine. It assesses the potential and current penetration of mobile money services on their remittance market. The paper finds the remittance market in the case countries to be highly competitive in terms of costs and variety of RSPs. Telco operators from the case countries have expanded their services towards certain bank-like and mobile money-like services, but the only true mobile money service so far is present in Armenia. Current portfolios of services offered by telco operators suggests that remittances inflows from Russia are important for future development of mobile money. The remittance market is thus important for mobile money development, but low costs are not the only enabling factor for these services. Other important aspects are convenience, accessibility, speed, transparency of rates, etc. Further development of mobile money in the case countries is highly probable, but it will most likely not be so intense as in other Asian and African countries.