Cross-border payments player Remitly is seeking more small and mid-sized business customers as the advance of stablecoins creates more international competition.
The company, which was founded in 2011, is attempting to draw SMBs and self-employed freelancers to its services by offering them a peer-to-peer tool that lets them pay vendors, contractors and employees internationally.
“We're evolving from a cross-border payments provider to a broad financial partner,” Remitly CEO Matt Oppenheimer said in an interview Thursday.
As of the end of the second quarter, Seattle-based Remitly had about 8.5 million quarterly active users, up from 6.9 million at the end of that quarter last year.
The company launched the service directed at SMBs during the second quarter and has attracted “thousands” of such customers since then who are sending transactions that are about twice the size of Remitly’s typical consumer customers, Oppenheimer told analysts on a quarterly earnings call Wednesday.
Those types of clients had tried to use the company’s basic services in the past, but it wasn’t tailored to them. Now they have a more tailored option, Oppenheimer explained.
The company is investing to draw and keep such SMB customers, Remitly Chief Financial Officer Vikas Mehta said on the call, referring to them as “high-amount senders.” He didn’t specify a dollar amount for that category, but said the number of customers sending more than $1,000 increased 45% for the quarter, compared to the year-ago period.
“Given that high-amount senders is a new category for us, we are also making deliberate strategic investments in competitive pricing to attract and retain this valuable cohort and to accelerate adoption,” Mehta told analysts on the call. “In 2H, we have launched a targeted marketing push tailored specifically to the needs and motivations of high amount vendors.”
The company’s marketing expense for the first half of the year increased about nine percent to $158.3 million, according to the second-quarter earnings report. That spending was equal to about a fifth of its $773.5 million in revenue through June. For just the second quarter, marketing expenses rose even more, climbing 10%.
The pitch to SMBs is one of the ways that Remitly is trying to tap new revenue streams. Other ways include the company packaging its digital wallet services and buy now, pay later financing into a new “membership” that will include a broader suite of financial services and offer cashback benefits, the executives said during the call. While the BNPL financing and wallet are available now, the company will have more details on the membership offering in September, Oppenheimer said.
Remitly faces legacy competition in the form of established money transmitters such as Western Union and MoneyGram, but it also must increasingly combat new breeds of rivals.
For instance, stablecoins are seen as a new means of sending money internationally and they received a boost last month from President Donald Trump signing the Genius Act, which will create a regulatory framework for such digital assets. A number of companies worldwide have begun to offer stablecoins, which are pegged to a steady asset, often the U.S. dollar.
While stablecoins may challenge Remitly, the company is also embracing the opportunity they present with new plans to allow the digital assets to be stored in its digital wallet, and to let customers receive payments from stablecoin wallets. To pull those services off, it has locked arms with two major companies operating in the area, including stablecoin issuer Circle and stablecoin rail provider Bridge, a business acquired by payments behemoth Stripe this year.
One threat to the company’s business that evaporated during the quarter was a planned new U.S. tax on remittances, another word for cross-border payments typically sent by migrants working in foreign countries. That proposed tax was ultimately reduced in Trump’s budget and will be imposed only on cash remittances.
Given Remitly sells digital payment services, its business won’t be directly affected by the tax, though it could benefit if the tax continues to push consumers toward non-cash payments.
“We expect the tax to further accelerate the shift from offline to online, benefiting Remitly when it's implemented on January 1, 2026,” Mehta said.
Fraud, another rising threat to payments, did strike Remitly in the second quarter, causing a nearly $4 million charge against the company’s results. Mehta described the “fraud incident” as “an isolated event that led to a discrete, non-recurring loss of $3.8 million.”
“We experienced a sophisticated fraud incident in May,” a spokesperson for the company said by email. “We responded swiftly to shut down the attack vector and evolve our already robust AI-driven risk models to identify similar fraud patterns in the future.”
In any case, Remitly logged second-quarter net income of $6.54 million, compared to a loss of $12 million in the year-earlier period, as revenue surged 34% to $411.8 million, according to the report.
