Earnings assessment for MoneyGram, Ria, and Western Union during Q2 of 2020

In the rapidly evolving world of digital finance, several key players are making strides and facing challenges in the remittance sector.

MoneyGram, a long-standing name in the industry, has seen a decline in its US market, with a 10% year-on-year drop in money transfer revenue recorded in Q2 2020. On the other hand, newcomer Remitly has been making waves, serving three million customers and reporting a significant 200% customer growth between May 2019 and May 2020.

Remitly's success is not limited to customer acquisition. The company has expanded its product offering, partnering with Greendot to provide immigrant bank accounts in the US. This move aims to cater to the growing needs of its customer base.

However, Remitly is not without competition. Both incumbents and fintechs focusing on digital plays pose a challenge. The emergence of banking as a service is reducing the barrier to entry for Remitly's competitors, who are launching similar products.

In response, Remitly is focusing on building trust with its customers. This strategy seems to be paying off, as 80% of the new Western Union users who signed up for Remitly were new to the service.

Western Union, another industry giant, has also seen a decline in its consumer-to-consumer (C2C) revenue, with a 12% year-on-year drop in Q2. However, the company managed to increase its operating margin to 19.9% in Q2, a testament to its resilience in the face of market difficulties.

Western Union's C2C transactions volume rebounded in June and July, growing 6% and 10% respectively. The company also reported a solid EBITDA increase but did not specify an explicit target for an EBITDA increase compared to the previous year in Q3 2020.

Ria, another Western Union subsidiary, has seen growth in North America, with a 20% year-on-year transactions growth in June. Ria also focused on increasing agent locations, which rose 13% to 435,000 in this quarter. Digital transactions initiated through the website or mobile app grew 98% in the quarter for Ria.

Euronet, another player in the remittance industry, wrote down its investment in XE by $82.7m in Q2. Meanwhile, MoneyGram reported a 106% year-on-year growth in digital transactions during the quarter.

Nynomic AG, a Swiss-based fintech, set a target for growth, including an EBIT margin increase compared to the previous year in Q3 2020. The company aims for over-average growth and an EBIT margin of about 16-19% in the medium term, despite market difficulties.

PayU, a leading online payment service provider, led the latest round of investment in Remitly, expressing confidence in the company's team and highlighting Remitly's product nuances around price, speed, and usability as supporting high retention rates.

In Latin America, Western Union reported a 45% drop in C2C revenue in Q2. Despite these challenges, the industry continues to evolve, with new players and strategies emerging to cater to the growing needs of a global audience.