Zepz Raises 267 Million for Expansion into Emerging Markets as 2024 European Cross-Border Payment Market Projected to Reach €365 Billion by 2030

According to a recent report by QY Research, Zepz, the fintech company formerly known as WorldRemit, has successfully raised $267 million in a funding round led by Accel, with notable participation from Leapfrog, TCV, and a $20 million commitment from the International Financial Corporation (IFC), part of the World Bank Group. This investment is geared towards accelerating Zepz's expansion into African markets and other emerging regions, further solidifying its position as a leader in cross-border payments.

Zepz's new financing builds on the momentum from its $292 million Series E round in 2021, shortly after acquiring Sendwave, a company specializing in mobile-based remittances. Despite this rapid growth, the company paused its plans for an initial public offering (IPO) in 2022, citing the desire for strategic flexibility and the current reluctance of investors to push for a public market debut. According to Accel partner Harry Nelis, there is no urgency to take Zepz public at this stage.

Founded in 2010 by Somali entrepreneur Ismail Ahmed, Zepz has grown into a significant player in the remittance industry. Originally focused on reducing the high fees associated with sending money to East Africa, Zepz now operates in 150 countries, offering services like bank transfers, mobile money, and cash pickups. Its expansion into key African markets, such as Kenya, South Africa, Uganda, and Zimbabwe, is a central part of its growth strategy.

However, the company has faced challenges despite claiming profitability in 2022. In early 2023, Zepz reduced its workforce by more than 26%, laying off 420 employees as part of a cost-saving measure. A few months later, it further downsized its workforce by 30 positions. The layoffs were attributed to redundancies and overlapping roles that were no longer essential to its business operations.

Looking forward, Zepz aims to use this latest funding to expand beyond its core markets in Africa, enhancing its cross-border payment infrastructure. With global remittances growing, especially during times of geopolitical and economic unrest, Zepz is poised to meet the needs of migrant workers and their families worldwide.（https://www.qyresearch.com/）

 

Market Overview

1. Market Size and Growth Forecast:
   The European cross-border payment market is set to reach a valuation of approximately EUR 211 billion in 2024, with projections to expand to EUR 365 billion by 2030 at a compound annual growth rate (CAGR) of around 7.5%​
2. Key Companies:
   Top players in the European cross-border payment sector include:

• Adyen N.V.
• Square, Inc.
• American Express
• FIS (Fidelity National Information Services)
• Visa Inc.
• MasterCard
• PayPal Holdings, Inc.
• Stripe, Inc.
• TransferMate
• Western Union Holdings, Inc.
• IFX Payments
• Sunrate
• Corpay
• Rapyd
• Payoneer Inc.

These companies lead in cross-border B2B and consumer transactions, with many advancing in areas such as AI-enhanced fraud detection, multi-currency wallets, and virtual commercial cards​

3. Downstream Demand Segments:
   The European cross-border payment market serves diverse downstream demand areas:

• B2B (Business to Business): Accounts for a significant portion of cross-border payment volume, especially in sectors like e-commerce and financial services.
• Consumer Remittances: Rising due to international workers and migrants sending money home.
• Online Retail and E-commerce: As European consumers increasingly purchase from international e-commerce sites, cross-border payments have expanded to accommodate these transactions.
• Education and Healthcare: Payments related to international tuition fees and cross-border healthcare expenditures are also growing segments​

This structure reflects the market's robust growth trajectory, supported by technological advances and the increasing global interconnectivity of businesses and consumers.（https://www.qyresearch.com/）

 

Investment Opportunities

The European cross-border payment platform industry offers numerous investment opportunities in 2024 due to various driving forces such as technological advancements, regulatory reforms, and increased demand for digital payment solutions. Here’s a deeper look at these opportunities:

1. Real-Time Cross-Border Payment Systems

Real-time cross-border payments are a growing trend as consumers and businesses increasingly prioritize speed and transparency in their financial transactions. Initiatives like SEPA Instant Credit Transfers are being widely adopted across Europe, making this a prime area for investment. Real-time payments offer several advantages, including reduced settlement times, 24/7 availability, and better liquidity management for businesses, making them a crucial component of the future cross-border payment ecosystem. Investors can target companies developing real-time payment infrastructure, such as payment orchestration platforms and fintechs offering seamless, instant cross-border payments.

2. Artificial Intelligence (AI) and Machine Learning (ML)

The integration of AI and ML in the payments sector offers significant opportunities for enhancing operational efficiency, fraud detection, and risk management. AI tools can analyze vast amounts of transaction data to identify patterns and detect fraud in real time, which is increasingly essential as cross-border transactions become more complex. For example, companies like Rapyd and Mastercard are leveraging AI for fraud detection and to optimize payment flows. AI-powered tools can also enhance payment processing by automating manual tasks such as reconciliation and currency exchange management, making investments in AI-driven payment solutions highly attractive.

3. Blockchain and Distributed Ledger Technology (DLT)

Blockchain technology is disrupting the cross-border payments industry by offering faster, cheaper, and more secure transactions without the need for intermediaries. Blockchain can streamline settlements, reduce transaction fees, and provide greater transparency in payments, which are crucial benefits for businesses engaged in cross-border trade. Additionally, the growing interest in central bank digital currencies (CBDCs), such as the digital euro, offers opportunities for investors to back firms developing blockchain-based infrastructure that supports CBDCs for cross-border payments.

4. B2B Payments and Multicurrency Solutions

The B2B cross-border payment market represents a significant area of growth, particularly with the rise of multicurrency wallets and real-time FX solutions. These tools allow businesses to hold, convert, and transact in multiple currencies, reducing traditional currency conversion costs and improving efficiency in managing international transactions. Firms providing solutions for B2B cross-border payments, including commercial cards, payment orchestration platforms, and treasury management systems, are well-positioned for investment. These platforms offer businesses the ability to manage cash flows, optimize FX transactions, and streamline complex international payment processes.

5. Merchant Acquiring and Payment Orchestration

Merchant acquirers and payment orchestration platforms are increasingly important in the cross-border payments space. As businesses expand globally, they require integrated payment solutions that can handle transactions across different currencies, payment methods, and regulatory environments. Investment opportunities lie in companies offering bundled payment services and acquiring solutions that combine online and offline payment channels. For example, firms like Adyen, Mollie, and Stripe are leading the charge in providing comprehensive payment solutions that cater to businesses operating internationally.

6. Open Banking and API Infrastructure

The rise of open banking in Europe, fueled by regulatory frameworks like PSD2 and the upcoming PSD3, presents a lucrative investment landscape. Open banking infrastructure providers that enable secure and seamless data sharing between financial institutions and third-party providers are becoming key players in the payments industry. These platforms facilitate real-time account access, payment initiation, and data aggregation, creating more personalized and efficient cross-border payment solutions. Investors can focus on companies developing API-based solutions that connect banks, fintechs, and other financial institutions, enhancing payment transparency and speed.

7. Fintech Consolidation and Strategic Partnerships

The European payments landscape is also seeing increased consolidation as larger players acquire smaller fintech firms to strengthen their market position. This creates opportunities for investors to engage in mergers and acquisitions (M&A) in the payments sector. Strategic partnerships between fintechs and traditional financial institutions are becoming more common, with the goal of providing comprehensive cross-border payment services. For instance, partnerships between fintech companies like Stripe, Visa, and Mastercard are paving the way for more innovative and scalable solutions.

8. Central Bank Digital Currencies (CBDCs)

As the European Union continues to explore the introduction of the digital euro, there are significant opportunities for investors to back companies involved in developing the infrastructure required for CBDCs. The digital euro could transform cross-border payments by making transactions faster, cheaper, and more transparent, particularly in reducing settlement times and improving regulatory compliance. This new digital currency ecosystem will require robust technology platforms, blockchain solutions, and financial services infrastructure, all of which present promising investment avenues.（https://www.qyresearch.com/）

 

Related Market Reports From QY Research

QY Research Releases Comprehensive Market Reports on the cross-border payment platform Market, as shown in the links below. These reports provide an in-depth analysis of the current market landscape, key trends, and future growth opportunities.

Global Cross-Border Payment Platform Market Insights, Forecast to 2030

https://www.qyresearch.com/reports/2825546/cross-border-payment-platform

Cross-Border Payment Platform - Global Market Share and Ranking, Overall Sales and Demand Forecast 2024-2030

https://www.qyresearch.com/reports/2527269/cross-border-payment-platform

Global Cross-Border Payment Platform Market Research Report 2024

https://www.qyresearch.com/reports/2203980/cross-border-payment-platform

 

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Kira Yue Qin

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