Small Word Financial Services (“Small World”) is an exemplar of a product business model. The company is one of Europe’s largest money transfer providers. Customers can transfer money via account transfer, mobile top-up, mobile wallet, home delivery, or pickup at a specific location (e.g., local bank branch).
Small World was founded in 2005 and, having undergone various funding rounds with external investors, it is now part owned by fund manager MMC Ventures. Small World has grown rapidly since inception and acquired a number of smaller money transfer services firms including Choice (Canada, USA and Spain), Express Funds (UK), Global Link (UK), LCC (Belgium, Côte d’Ivoire, Germany, France, Ireland, Luxembourg, Netherlands, Portugal and United Kingdom), Swiss Transfers (Switzerland), Universal de Envíos (Spain) and Uno Money (Spain and Italy). Small World has chosen to maintain these separate brand names globally, however searching for these brands online brings potential customers back to the Small World’s website, since Small World is at the strategic centre of this global network of money transfer brands.
MMC, alongside FF&P Private Equity, invested in Small World’s further international expansion in 2011. While continuing to expand, the firm is also working towards increased operational efficiency. For instance, it has invested in Google Apps, bringing the communications technology of the firm including email and calendars on to the Cloud, to enhance communication capabilities across its global network.
Small World Financial’s competitors include Western Union, WorldFirst, Transferwise, and PayPal, among many others.
Customers include individuals and SMEs. Individual customers typically want the flexibility of transferring money to a recipient abroad in a short time. Small World does not require customers to have an account containing significant assets. SME customers typically use foreign suppliers and need the flexibility to pay them at short notice. However some SME customers conduct a significant amount of their business in other currencies and require assistance beyond paying suppliers e.g. dealing with investments.
Learn more about the Product Business Model
A dyadic transactional relationship where your good or service can be designed and delivered without prior interactions with the customer.
Engagement — Value Creation Proposition
Customers are offered a simple and quick way to transfer money abroad, avoiding expensive bank fees and foreign currency exchange fees. Customers can choose from a variety of money transfer options and recipients have a variety of options to receive money as well. These options include account transfer, mobile top-up, mobile wallet, home delivery, or pick up at a specific location (e.g., local bank branch).
Delivery — Value Chain
Value delivery is primarily organized largely in-house. Small World is responsible for processing the money transfer and all the associated paper work. Partner institutions such as banks and phone companies allow Small World access to customers’ accounts in order to make deposits and debits. With home/office delivery, a third party transports the money from a bank to the recipient.
Monetisation — Value Capture
Small World charges a small to individuals and SMEs per transfer, with the fee depending on which service is used to transfer. For home/office deliveries, Small World pays the delivery agents, as a supplier, a commission out of the fees originally charged to the customers transferring the money.
Disclaimer — Written by Hannah Buckley and edited by James Knuckles under the direction of Prof Charles Baden-Fuller, Cass Business School. This case is designed to illustrate a business model category. It leverages public sources and is written to further management understanding, and it is not meant to suggest individuals made either correct or incorrect decisions. © 2016 Published 23 April 2016