Remitly creates membership tier, expands product offerings

• Key Insight: Remitly launched a subscription membership and new digital finance products at an investor keynote event this week.
• What's At Stake: 8.5 million customers across 170 countries currently use Remitly to send international P2P payments.
• Forward Look: When remittance tax takes effect in the U.S. next year, Remitly CEO thinks customers may seek digital options instead of traditional cash remittances.

Remitly expanded its digital remittance offerings this week and created a monthly subscription offering for users, as the international payments platform is seeking to vertically expand its customer base and take advantage of stablecoins in the near future.
The fintech, which offers digital cross-border payments to over 8.5 million customers, initially announced its subscription-based membership tier during the company's most recent earnings call in August. The membership product, called Remitly One, was formally launched at a product keynote event in New York City after market close on September 9 alongside a suite of new product launches.

One new service released by the company at the keynote event was a "send now pay later" cash advance called Remitly Flex. Introduced during the August earnings call but officially released this week, Flex allows users to send interest-free advance payments that can then be paid back at a later time.

"Remitly Flex is designed to help customers remove and manage their money across borders in urgent moments," Ankur Sinha, Remitly's chief product and technology officer, said during the event. "Moving to this country often means starting from scratch without a credit history. When cash is tight, even small emergencies can quickly turn into big ones. Flex was built to change that."

The company's new product lineup also includes Remitly Wallet, a digital wallet built into the platform's app for all users, and a digital debit card specifically for Remitly One members that allows them to spend money from their digital wallet directly and eliminates foreign transaction fees from international purchases.

Later this month, Remitly will introduce multicurrency digital wallets for both fiat currency and stablecoins to select Remitly One members. Remitly is not issuing its own stablecoin in the product release; instead, eligible members will be able to hold and exchange USDC stablecoins (through a partnership with Circle) in their Remitly Wallet alongside other fiat currency holdings.

"Long term this will enable us to move value instantly, reduce friction in liquidity and revenue and give customers the ability to hold their savings in something stable like the U.S. dollar," Sinha said.

Remitly is a digital platform for international money transfers. The company's CEO, Matt Oppenheimer, told American Banker that Remitly got its start in traditional remittance payments but is expanding into the larger cross-border payments market.

"When folks talk about remittances, they tend to think about funds that are flowing north to south; from developed to developing countries," he said. "When folks talk about cross-border payments, specifically person-to-person payments, they tend to refer to sending money within Europe or between Europe and the U.S. We view ourselves as a cross-border payments provider because we operate in 170 countries and have a wide range of customers that use our service."

Section 4475 of the One Big Beautiful Bill Act, signed into law on July 4, establishes a 1% tax on physical remittance payments originating from the U.S. starting at the end of this year. As a digital remittance provider, Remitly is unaffected by the upcoming tax, and Oppenheimer believes that the company may actually see additional growth next year from users looking for digital alternatives to traditional cash remittances in an effort to bypass the additional tax.

The Remitly One membership is meant to provide additional benefits and services to users willing to pay its $9.99 monthly fee. For example, the company's Flex cash advance is available to all users, but customers using it for free have a three-day wait time to receive funds while Remitly One subscribers can access funds instantly.

"We looked at the range of benefits that we're offering our customers and tested what they're willing to pay for given those benefits," Oppenheimer said. "We're seeing from customer behavior that this is a price customers are willing to pay for the wide range of benefits that we're offering, including the send now pay later solution, $5 monthly cash back for certain activities and the 4% cash boost on U.S. dollar balances in their Remitly Wallet. For us, it helps deepen the relationship with our customers: Flex members, as an example, send more remittances, which increases the overall relationship and value we have with our customers."

The company ran a pilot test of Remitly Flex earlier this year, according to a company representative, but did not disclose specific metrics from the pilot's results.

Sinha told American Banker that the company is aiming to serve different segments of customers by bringing different types of products and extra benefits into the Remitly One subscription.

"We're not focused on a singular segment or cohort of customers," he said. "If you look at the segment of customer that has lower to average transaction size in terms of remittances and lives paycheck to paycheck, their primary focus might be on an offering like Flex. A different segment of customers might be living in different countries and want to have access to funds in different currencies and earn rewards from adding money to the Remitly Wallet. Different segments of customers will find different values from it, and the combination of what they get should be worth what they're paying. Then we encourage them to drive more usage off the subscription because it provides even more value."

A Keybank Capital Markets report on Remitly's product keynote event stated that analysts were "encouraged by potential new revenue streams from elements such as the membership (subscription), the Remitly card product (interchange), and customer balances (NIM)," but "from a pricing standpoint the $9.99 monthly membership fee is higher than we had anticipated, though unpacking the value delivered through the membership makes the price a bit easier to understand." 

If a Remitly One member maximizes the company's "up to $5 cash back per month" offer through various financial activities like adding funds to the Remitly Wallet or setting up autopay for Flex, they have the potential to effectively cut their monthly subscription fee in half, according to the KeyBank report and company executives.

A William Blair analyst report viewed the announcement positively and rated the company's public stock as Buy/Outperform.

"The core remittance business will support years of growth, in our view, while the new initiatives should support long-term growth," the report said. "The initiatives discussed at today's event are not Remitly's first foray expanding beyond money transfer, but we believe the product market fit more closely aligns with the company's existing customer base versus prior initiatives.

"Unlike the Passbook initiative (launched in 2020, shuttered in 2023), which aimed to position Remitly as a digital bank, the company is now focused on vertically integrating essential financial services that its customers need but often lack access to through traditional institutions," the report continued. "We believe these initiatives have the opportunity to drive improved engagement, retention and acquisition over time."