Remitly Global Inc

Overview

Remitly was founded in 2011 with a vision to transform the lives of immigrants and their families by providing the most trusted financial services on the planet. As our business has grown over the last decade - so must our vision. In order to continue to serve our existing customers as well as serve other global citizens with cross-border financial needs we have expanded our vision to transforming lives with trusted financial services that transcend borders.

The inspiration behind Remitly came when Matt, our co-founder and Chief Executive Officer, was living and working in Kenya. Living abroad, he experienced firsthand how painful it could be to send money across borders, and witnessed how far that money could go once it made it home. In Matt’s own words, remittances are all about trust, and he’s committed to making Remitly the most trusted financial service provider in the world. Today, Remitly is a leading digital financial services provider for immigrants, their families, and other global citizens in over 170 countries around the world. The long-term, trusted relationships we foster with our customers have enabled us to expand our core cross-border remittance product to over 5,000 corridors worldwide, and we are working to offer complementary new products to our 5.9 million quarterly active users.

Our customers are at the heart of everything we do. We believe that when we can provide more people with access to trusted financial services that transcend the barriers of borders, they can change the future. Our customers do this by transforming the local economies where they live and work, as well as the communities where they share access to trusted financial services.

Remitly’s culture is key to our success, and our cultural values act as a blueprint for how we accomplish everything we do. We regularly refresh our values to align with our strategy. The one constant, and single most important of these values iscustomer centricity, which serves as our north star in all that we do. To us, customer centricity means “we are here to listen to, learn from, and serve our customers.”

Our other core values fall broadly into three categories:

•Our purpose: Aim for the stars, be an owner, and earn trust through integrity; and

•Building relationships: Lead authentically, be global, hire and grow exceptional people, be constructively direct, be a compassionate partner, and be joyful; and

•Taking action: Have a bias for action, be data-driven, sweat the details, deliver on promises, overcome fear, and continuously improve.

These values influence our actions every day. Living up to our values builds customer trust, inspires employee engagement, and makes “Promises Delivered” our fundamental ethos.

Acquisition of Rewire

On January 5, 2023, we acquired 100% of the outstanding equity interests of Rewire (O.S.G.) Research and Development Ltd., a company organized under the laws of the State of Israel (“Rewire”), for approximately $77.9 million of aggregate consideration, the majority of which was or will be settled in cash, with the remaining consideration settled or to be settled in Remitly equity. The acquisition of Rewire allows us to accelerate our opportunity to differentiate the remittance experience with complementary products and expands our remittance businesses in new geographies all with a strong team that is culturally aligned with Remitly.

2023 Key Performance Metrics

Substantially all of our revenue today is generated through our remittance business, where we earn revenue from transaction fees charged to customers who are sending remittances and the foreign exchange spreads earned between the foreign exchange rate offered to customers and the foreign exchange rate on our currency purchases.

In addition to our financial results, we regularly review key business metrics to evaluate our performance, identify trends affecting our business, prepare financial projections, and make strategic decisions. We believe that these key business metrics provide meaningful supplemental information for management and investors in assessing our historical and future operating performance. The calculation of these key business metrics discussed below may differ from other similarly titled metrics used by other companies, analysts, or investors. The key business metrics that we use to measure the performance of our business are defined as follows:

•“Active customers”is defined as the number of distinct customers that have successfully completed at least one transaction using Remitly during a given period. We identify customers through unique account numbers.

•“Send volume” is defined as the sum of the amount that customers send, measured in U.S. dollars, related to transactions completed during a given period. This amount is net of cancellations, does not include transaction fees from customers, and does not include any credits, offers, or bonuses applied to the transaction by us.

As active customers are measured on a quarterly basis, the data for the full-year periods for active customers is not meaningful, and therefore this metric is only presented on a quarterly basis herein.

Our 2023 key performance metrics included the following results:

•Active customers for the fourth quarter of 2023 increased to 5.9 million, from 4.2 million, up 41% year over year.

•Send volume for the year ended December 31, 2023 increased to $39.5 billion, from $28.6 billion, up 38% year over year.

The charts below present the respective key metrics for the past five fiscal years (active customer figures below represent active customers during the fourth quarter of the respective year):

Our Services

We provide a digital cross-border remittance product that is accessible via our mobile app or the web. Our customers are able to set up an account and start sending money to international recipients on our platform, generally within minutes. Recipients can receive funds in multiple ways using our diversified and global disbursement network. Our customers can also track the status of their transactions as they are processed. Today, our customers predominately engage with us via their mobile phones, either using our app or website, shifting what traditionally required waiting in line to speak with an agent to hand held devices. Providing our customers with a convenient, easy, and safe mobile experience underpins our approach to product development, marketing, and customer success.

Our remittance revenue is earned from transaction fees charged to customers who are sending remittances and the foreign exchange spreads between the foreign exchange rate offered to customers and the foreign exchange rate on our currency purchases.

While our journey began in digital cross-border remittances, we continue to evolve and invest in our technology platform to be able to deepen relationships with our customers. We believe this will allow us to address our customers’ discrete financial services needs, many of which are not met by legacy institutions.

Substantially all of our revenue is currently generated from digital cross-border remittances.

Strategy

We operate in a large and fragmented cross-border payments market that provides financial products and services to approximately 1 billion customers around the world. Based on estimates from FXC Intelligence, the consumer to consumer cross-border payments market is currently approximately $1.8 trillion and is expected to reach $3.3 trillion by 2030, growing at a CAGR of approximately 8%. As of December 31, 2023, we had captured approximately 2% of this market. Our strategy is to build on our trusted brand and technology platform by offering products and services in the cross-border payments market. We also believe that the global scale and breadth of our global money movement network that we have built over many years provides additional opportunities to leverage our platform to provide value to customers and businesses across the cross-border payments landscape. According to FXC Intelligence, the current market for consumer to business cross-border payments is approximately $3.1 trillion, business to consumer cross-border payments is approximately $1.7 trillion, and small to medium business cross-border payments is approximately $10.4 trillion.

Our approach to achieving our strategy has been rooted from Day 1 incustomer centricity, which means deeply understanding our customers’ unique and local needs to provide them with a differentiated experience in cross-border offerings around remittances. Strategically, managing our business from this perspective has been key to our success since the very beginning and forms the framework for the remainder of our strategy, which includes the following focus areas:

•Deliver a fast, reliable and seamless end-to-end transaction experience that is tailored and localized to meet the needs of our global customer base. Delivering cross-border financial services in a trusted and reliable way to many customer segments is incredibly complex. We are focused on delivering a fast, reliable, and seamless experience to customers that builds trust and drives repeat engagement with our platform. Examples of complexity in cross-border financial services that we are investing in include localization across over 170 countries, reducing friction for customers across different payment methods and currencies, fraud and compliance systems that prevent bad actors while at the same time maintaining a great overall customer experience, sophisticated treasury and foreign exchange management, and delivering funds reliably and speedily to billions of bank accounts, billions of mobile wallets, and thousands of cash pick-up locations across the globe. All of this requires scale and a digital first approach and importantly, a critical focus on reducing unnecessary friction across all stages of the remittance journey which Remitly is uniquely qualified to deliver.

•Hyper localized marketing at attractive unit economics. We plan on continuing to invest in delivering a superior, trusted remittance experience for our customers, creating loyalty and a long-term relationship with our customers while also acquiring new customers at highly attractive unit economics. Our investments in performance, organic, and brand marketing along with increasing word of mouth will continue to drive efficient new customer acquisition. We have been able to drive efficiencies in new customer acquisition by focusing on elasticity testing, scaling search engine optimization, developing high-quality content, optimizing channel mix, deploying localized marketing campaigns, and by increasing word of mouth and referrals driven by our increasing scale and product enhancements. As we scale our customer base, we expect to benefit from increased leverage on our variable transaction costs which allows us to continue to invest in driving new customers to our platform at attractive unit economics.

•Unlock incremental customers, corridor types, and geographies. We see an opportunity to generate value by expanding our cross-border financial services more broadly to additional customers and markets around the world. While our global network spans over 5,000 corridors, we have plans to increase our reach to thousands of additional corridors. Although our customer base today is primarily immigrants that regularly send money home to family and friends in developing countries, we believe our platform can serve additional customers that have cross-border financial needs. We expect to leverage our data-driven approach to optimize the value we deliver to our customers, product features, marketing strategies, and customer economics as we expand and grow to new geographies and customers. Additionally, we expect to leverage our localization expertise and our technology platform to grow the number of disbursement, payment, and other partners in our global network and increase the quality and number of direct integrations with such partners. We will also continue to establish new disbursement partnerships and add new payment methods to enhance our cross-border payment remittance experience for current and potential customers in our existing corridors.

•Deepening our customer relationships, including through complementary new products. We believe there are enormous opportunities to create a more inclusive financial system that caters to customers that have cross-border financial needs. In connection with these opportunities, we are using the trust and insights we have with our customers to develop complementary new products. We believe our investments in complementary new products will deepen and expand our relationship with our customers creating a unique and virtuous cycle that leads to increased customer value, long term customer engagement, and a competitive advantage for Remitly.

What Sets Us Apart

Our brand promise is to bring “peace of mind” into everything we do. We focus on bringing trust, reliability, and a fair and transparent price to cross-border financial services.

There are four core elements to our differentiated approach:

•Mobile First. Our mobile app for cross-border remittances provides an easy-to-use, end-to-end process with a simple and reliable user experience that delivers peace of mind. In just a few minutes, customers are able to set up and send money for the first time with Remitly, and repeat transactions are easier with just a few taps. Our customers and their families can also track the status of their transactions as they are processed, and we provide a reliability promise to customers which is underpinned by our sophisticated risk models, high quality network, and empathetic customer service. This mobile-first experience enables us to engage beyond the initial transaction, generating strong repeat usage and high customer loyalty. Our services are highly non-discretionary for our customers which results in high revenue visibility throughout economic cycles.

As of December 31, 2023, our Remitly mobile app had a 4.9 iOS App Store rating with more than 1.4 million reviewers and a 4.8 Android Google Play rating with more than 740,000 reviewers. We have achieved this level of engagement and these high ratings by designing mobile-first products that make the customer experience simple and convenient and give our customers complete peace of mind.

•Global Scale and High Quality Money Movement Platform. Our global network of funding and disbursement partnerships enables us to complete money transfers efficiently in over 5,000 corridors without the need to deploy local operations in each country. We are able to do this while complying with global and local licensing and regulatory requirements. A corridor represents the pairing of a send country, from which a customer can send a remittance, with a specific receive country to which such remittance can be sent. As a result of the quality of our network and the foundational investments we have made, in general every new send country we add results in a significant number of new corridors, as we are able to quickly connect send countries with receive countries, allowing us to continue to scale rapidly. Our scale and direct integration strategy allows us to negotiate highly favorable terms with both funding and disbursement partners while providing a great end-to-end customer experience including rapid and reliable transfers.

We provide broad and high quality disbursement options to our customers allowing them to choose the method that is most convenient for their family and friends to receive funds. We have partner relationships with global banks, aggregators, and leading payment providers to give our customers an array of payment (or pay-in) options, including with a bank account, card-based payments, and alternative payment methods.

Our disbursement network enables us to send (or pay-out) funds to over 4.2 billion bank accounts, over 1.2 billion mobile wallets, and approximately 460,000 cash pick-up locations. We focus on creating financial inclusion by providing payout optionality and access for recipients who do not always have convenient access to traditional banking. We believe our focus on financial inclusion creates peace of mind for our customers and their families while attracting and retaining loyal customers.

•Highly Attractive Unit Economics. Our data driven approach to optimizing customer lifetime value combined with a localized and scalable marketing platform allows us to acquire new customers at highly attractive unit economics. As we improve customer lifetime value through product enhancements and changes to variable operating costs, we are able to invest more in marketing while maintaining our marketing efficiency. We believe our expertise in localizing our marketing, products, and customer support at scale is a key differentiator and enables us to provide customers with a personalized experience that drives peace of mind while also delivering high returns on marketing and product investments.

•Superior Technology Platform. We believe that our differentiated approach to building our technology infrastructure enables a great customer experience and allows us to scale to meet customer demands in a more flexible way. We have been able to scale to more customers, more regions, and more use cases while continuing to get better at our reliability, speed, and performance due to our investments and unique approach to our technology platform. This enables not only our ability to scale, but also accelerates innovation on behalf of our customers - whether that is doing simple things well like delivering reliability, speed, and performance, or about enabling new use cases like complementary new products over time. Because our customers initiate transfers digitally, we capture and leverage a body of transaction-related data that provides insight into customer behavior and customer experience. This data and the analytics we perform help to inform our marketing investments and product development prioritization. In addition, we leverage our data platform and proprietary models to improve our compliance systems and manage pricing, treasury, fraud risk, and customer support. Finally, our proactive investments in artificial intelligence and machine learning have continued to drive scaled improvement in the areas of fraud and risk, pricing, customer support, and marketing.

Our Global Network

Our global network of funding and disbursement partners is at the core of our business. Over the last decade, we have strategically expanded and improved the quality of our network in existing corridors to provide our customers with increasing disbursement options and in new corridors as part of our expansion strategy. A key focus of our global network strategy is continuing to expand the number of direct integrations with local partners. These direct integrations allow for a better customer experience and lower costs and are a significant competitive advantage. Our partners, including those that are among the most trusted and recognized brands around the world, create a broad and effective payment acceptance (pay-in) and payment delivery (pay-out) ecosystem for our customers:

•Payment acceptance. We have relationships with top tier banks and leading global payment processors and networks. These relationships provide our customers an array of payment (or pay-in) options to fund remittances with a bank account, card-based payments, and alternative payment methods.

We can accept and settle transfers from hundreds of millions of consumer bank accounts, payment methods such as Apple Pay and Google Pay, as well as Visa and Mastercard credit and debit cards. As a digital service, we typically do not have sending agents who accept cash. We, in turn, do not incur costs or commissions associated with physical agent-based sending and funding.

•Payment disbursement. We provide broad access to disbursement options for our customers including cash and digital disbursement options. Our broad disbursement network provides peace of mind and allows customers to choose whatever method works best for their family and friends to receive funds. We have access to many disbursement partners across the globe including major banks, aggregators, cash pick-up, and mobile wallet partners. These relationships provide our customers with choice of disbursement and enable us to send funds within minutes, or even seconds, to over 4.2 billion bank accounts, over 1.2 billion mobile wallets, and approximately 460,000 cash pick-up locations (including retail outlets and banks).

We select our disbursement partners based on our recipients’ preferences, quality of service, cost, brand recognition, and co-branding opportunities. Our disbursement partners make us a trusted source of remittances because our customers are typically already familiar with their chosen disbursement partner and recipients feel comfortable receiving money where they regularly bank or shop. In addition, we only select disbursement partners that meet or exceed: (1) our geographic coverage goals in the markets in which they operate; (2) our robust compliance and regulatory requirements; and (3) our specific operating metrics such as credit worthiness and error rates.

As a result of our scale, we are able to establish multi-faceted partnerships. These partnerships enable the ability to source and settle foreign exchange rates locally, accept payments, or deposit customer funds directly to customer accounts. In addition, we have redundancies built into our global network for our various partnerships.

Today, our customers primarily send money from the United States, Canada, the United Kingdom, and other countries in Europe. Our customers and their recipients are located in over 170 countries around the world; our largest receive countries include India, Mexico, and the Philippines.

Technology

Our Technology Platform

Our purpose-built technology platform powers localized consumer experiences, enables a robust network of partner integrations, and uses data to optimize business performance, while enabling our ability to expand into complementary new products.

Our unique technology platform has broad and complex capabilities and, together with our proprietary data, gives us a unique advantage in understanding our customers and being able to meet their needs. Given the scale of our business, the local nuances of the markets we serve, and the complexity of digital cross-border payments, investments in our technology have positioned us for efficiency and continued growth. Our technology platform is comprised of the following:

•Core transaction engine that underpins the entire transaction lifecycle along with a sophisticated pricing engine that enables ongoing price optimization;

•Customer experience interface, across Android, iOS, and Web with corridor-specific user journeys and multilingual self-service or real-time support;

•Disbursement network for partner integrations that supports a diverse set of disbursement methods for our customers and their recipients in over 170 countries;

•Our electronic Know Your Customer (“KYC”), machine learning-based fraud scoring and payment authentication processes that all take place in real-time to give our customers immediate feedback and are in compliance with highly complex and continuously evolving global and local regulations; and

•Marketing technology stack that enables our marketing team to efficiently operate and improve the quality of our customer experiences by supporting our localization strategies and efficiently capturing and analyzing data to ensure maximum long-term return on our marketing investments.

Customer Experience

We strive to make each customer interaction on our digital products intuitive and free of unnecessary friction. New customers can typically initiate a transaction with only a few taps after setting up their account and adding their recipient’s information. We have further streamlined the experience for existing customers completing repeat transactions. In addition, we recognize that customers' needs and preferences vary across corridors and continue to localize the customer journey in select corridors, from language, to product selection, to the specific flow and product options. Finally, when errors or delays do occur, we strive to enable our customers to take control of the issues and resolve directly within our product, whenever possible.

We invest substantial resources and rely on data and insights to understand our customers’ needs in order to continually innovate to deliver even richer features, products, and services. We therefore have significant resources dedicated to technology and development across multiple teams including product, engineering, design, analytics, compliance, marketing, and customer service. These teams are responsible for the envisioning, design, development, and testing of our platform and services. We focus the majority of our investment on developing new functionality, making it accessible and relevant globally, improving the customer experience and optimizing fraud loss rates, and further enhancing the usability, reliability, and performance of our platform and services.

Competition

We have experienced and expect to continue to experience competition from a number of companies, including those who are well-established or who may have greater resources, and those who may become meaningful competitors in the future. Our competitors generally fall into the following categories:

•Incumbent providers with a scaled legacy footprint. Traditional providers with large networks of brick-and-mortar locations and agents around the world, that have been slow to adopt digital solutions.

•Traditional banks. Traditional bank networks that offer a wide variety of financial services, including international remittances, but have limited disbursement options and may have burdensome KYC processes that do not cater to immigrants or other global citizens.

•Digital-first cross-border payment providers. Digital-first providers of payments, money transfer, and remittance products that aim to be convenient, transparent, and affordable, with varying corridor-related focuses, such as developed-to-developing or developed-to-developed markets.

•Emerging players focused on complementary financial products and services. Digital-only banks, wallets, and other emerging digital players typically offer a subset of the financial services offered by traditional banks, and generally place a greater emphasis on convenience and user experience. Similarly, those utilizing blockchain technology and digital or crypto assets often claim benefits of lower cost transactions and higher transfer speeds relative to incumbent money-movement providers. However, price volatility, various fiat conversion fees, user friction, lack of trust, legal and regulatory uncertainty, and other factors have limited the utility of cryptocurrencies, as well as digital assets broadly, for remittances. Still, Remitly continues to assess blockchain technologies and digital assets (and our users’ preferences towards them) as both an opportunity and competitive risk, particularly as the technology continues to evolve.

•Informal person-to-person channels. Bringing cash home when immigrants travel, trusting others to deliver cash back home, established networks of “IOUs” based on documentation or passwords, and other systems of trust-based cash transfers that evade tracking and regulation. As digital-first cross-border payment providers continue to expand reach and provide higher quality and accessible services, we believe the share of informal person-to-person channels will likely diminish over time, expanding the addressable market for the competitor categories above.

Digital-first companies are increasingly gaining market share from legacy providers and traditional banks. We believe that the principal competitive factors across experience, product, network, and technology include:

•Experience: Digital-first companies, like Remitly, are focusing on the customer experience, by providing a trusted relationship with customers and their families, especially during devastating times, which ranges from family emergencies to natural disasters. Digital first companies also provide a simple and convenient customer experience, which is specialized to customers by region, which appeals to customers and their families on a hyper-local level.

•Product: Digital-first companies have the ability to focus on the product. With the various pay-in and pay-out options, the speed and certainty of transactions is a competitive advantage. Additionally, these companies are able to provide an adjacent suite of digital-first financial services (complementary products) with fair and transparent product pricing, while providing global and local customer service.

•Network: Digital-first companies leverage their expansive global network, which allows the companies to provide a vast array of easy-to-access disbursement options and the ability to accept alternative payment methods.

•Technology: In a world of being digitally connected, digital-first companies focus on technological differentiation, through service availability, performance, scalability, and reliability. The ability to innovate continues to be a competitive advantage. Additionally, technology allows for efficient fraud, compliance, and regulatory management in the highly regulated industry.

By focusing on the unique needs of immigrants and having a relentless customer focus, we believe that we have built a differentiated and compelling value proposition, and that we compete favorably on the basis of these factors.

Specifically, we believe that our mobile-first suite of products, our vast global network, our localization expertise at scale, and our data-driven approach create sustainable differentiation against competitors.

Regulatory Environment

Our business is subject to a wide range of federal, state, and international laws, regulations, and supervisory guidance across the globe. The majority of these are applicable to us on the basis of the jurisdictions in which we operate and conduct our activities. These include, without limitation, the United States, Canada, the United Kingdom, and the European Economic Area (the “EEA”). We are also subject to laws, regulations, and guidance on the basis of the jurisdictions in which recipients receive disbursements. These include India, Mexico, and the Philippines as well as other receive countries. These laws and regulations include strict requirements intended to help detect and prevent money laundering, terrorist financing, sanctioned persons and activity, fraud, data misuse, theft and misappropriation, and other illicit activity. In addition, the applicable regulatory framework includes laws, regulations, and guidance regarding money transmission licensing, financial services, consumer protections including disclosures, foreign exchange, safeguarding of customer funds, currency controls, unclaimed property, privacy, and cybersecurity. The regulatory requirements applicable to our business in any given jurisdiction are typically extensive, complex, frequently evolving, and increasing in scope, and may impose overlapping and/or conflicting requirements or obligations. For more information, see the section titled “Risk Factors—Legal and Compliance Risks.”

We have developed and implemented a compliance program, including our anti-money laundering (“AML”) and consumer protection programs, composed of policies and procedures designed to comply with such regulatory framework as it applies to our business. We also monitor these areas closely to continue to adapt our business practices and strategies to help us comply with the current and evolving regulatory environment.

Anti-Money Laundering. In the United States, our business is subject to federal AML laws, regulations, and supervisory guidance, which include the Bank Secrecy Act (the “BSA”), as amended by the USA PATRIOT Act of 2001, as well as similar state laws, regulations, and supervisory guidance. The BSA, among other things, requires companies engaged in money transmission to register with the Financial Crimes Enforcement Network (“FinCEN”) of the U.S. Department of the Treasury as money services businesses and to develop and maintain risk-based AML programs, report suspicious activity, and collect and maintain information about their customers and certain transaction records. These requirements may also apply to our disbursement partners and, if our partners are service providers who have relationships with their own disbursement providers, those partners’ disbursement providers (“disbursement sub-partners”). Furthermore, FinCEN has interpreted the BSA to require money services businesses to conduct risk-based monitoring of their counterparties.

Similar AML laws, regulations, and supervisory guidance in the countries where we operate and those where we are licensed apply to our business internationally. These include laws, regulations, and supervisory guidance to detect and prevent money laundering and terrorist financing, including obligations to collect and maintain information about our users, recordkeeping, reporting, and due diligence and supervision of our counterparties similar to, and in some cases exceeding, those required under the BSA. We are also, to a lesser extent, impacted by AML laws, regulations, and supervisory guidance in the other countries in which our disbursement partners and disbursement sub-partners operate.

As a money services business, we maintain a stringent AML compliance program that includes internal policies and controls, designation of AML compliance officers for each of our regulated subsidiaries, ongoing employee training and monitoring programs, and annual independent reviews.

Sanctions. Our business must also comply with U.S. economic and trade sanctions programs administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) and with similar sanctions administered by sanctions authorities in other jurisdictions in which we operate or where we are licensed. These laws, regulations, and supervisory guidance prohibit or restrict transactions in, to, or from certain countries, regions, or governments, as well as with certain individuals and entities such as traffickers in illegal goods or services, terrorists, and terrorist organizations. Sanctions are imposed to address acute foreign policy and national security threats and may change rapidly and unpredictably in response to world events or domestic or international political developments.

We have implemented policies, procedures, and internal controls that are designed to comply with these economic and trade sanctions programs. These measures include, without limitation, controls designed to prevent transactions to or from countries or territories that are subject to comprehensive sanctions, screening certain transactions and customer information against OFAC and other international government watch-lists, blocking funds of persons named on OFAC’s list of Specially Designated Nationals and Blocked Persons and other persons and entities designated as prohibited persons by U.S. and non-U.S. sanctions authorities, and preparing and submitting blocking and other reports as required by relevant authorities.

Anti-Bribery. We are subject to regulations imposed by the Foreign Corrupt Practices Act (the “FCPA”) in the United States, the Corruption of Foreign Public Officials Act in Canada (“CFPOA”), the U.K. Bribery Act in the United Kingdom, and similar laws in the other jurisdictions in which we or our disbursement partners or disbursement sub-partners operate, which generally prohibit companies and those acting on their behalf from making improper payments to foreign government officials for the purpose of influencing official action or otherwise gaining an unfair business advantage, such as obtaining or retaining business. We maintain a compliance program designed to comply with applicable anti-bribery laws, regulations, and supervisory guidance.

Money Transmission and Stored Value Licensing or Registration. We are subject to licensing and registration requirements in relation to our money transmission and stored value issuance activities on a state by state and federal basis in the United States and in almost every other jurisdiction from which our customers initiate transactions, including, but not limited to, Canada, the United Kingdom, and the EEA.

In the United States, we are registered as a Money Services Business with FinCEN, and we hold licenses to operate as a money transmitter (or its equivalent) in the 48 states where such licenses are required, as well as in the District of Columbia and various U.S. Territories. As a licensed money transmitter, we are subject to, among other requirements, restrictions with respect to the investment of customer funds, reporting requirements, bonding requirements, minimum net worth requirements, customer disclosure requirements, regulatory approval of directors and senior management of the licensed entity, AML and sanctions compliance, cybersecurity program requirements, and examination by state regulatory agencies. In connection with certain licenses we hold in the United States, there are also different shareholding thresholds that may require a shareholder to obtain regulatory approval prior to exceeding such thresholds.

Outside the United States, we provide services to our customers in a variety of ways. In several key jurisdictions, we have obtained licenses or are registered to operate as a money services business or payment institution, as applicable. In Canada, we are registered with the Financial Transactions and Reports Analysis Centre of Canada as a money services business. In the United Kingdom, we have obtained a payment institution license from the Financial Conduct Authority. In Ireland, we have obtained a payment institution license from the Central Bank of Ireland, and such license permits us to provide certain payment services across the EEA. We also hold licenses in several other jurisdictions and plan to apply for money transmitter licenses or their equivalents in additional jurisdictions. Additionally, in several foreign jurisdictions, we work with disbursement partners to make funds available to recipients. These may be locally licensed businesses or regulated banks whom we believe to be compliant with local laws.

Under these licensing regimes and associated regulations and supervision, we are subject to requirements such as capital and safeguarding rules, certain consumer protection requirements, IT and operational security risk management requirements, outsourcing oversight requirements, and periodic regulatory examinations. In certain countries, we are able to serve our customers through the use of disbursement partners instead of obtaining our own license. These entities are typically locally licensed businesses or regulated banks whom we believe are compliant with local laws.

Unclaimed Property. We must also comply with unclaimed property laws in the United States and in other countries where we are licensed. These laws require us to remit to certain government authorities the property of others held by us that has been unclaimed for a specified period of time, such as unpaid money transfers. We hold property subject to unclaimed property laws and we have an ongoing program designed to help us comply with these laws. We are subject to audits with regard to our escheatment practices.

Consumer Disclosure and Consumer Protection. We are subject to laws, regulations, and disclosure requirements relating to consumer protection in the United States and other jurisdictions in which we have operations, where such laws, regulations, and supervisory guidance are enforced by numerous government agencies. In the U.S., the Consumer Financial Protection Bureau (the “CFPB”) implements, examines compliance with, and enforces federal consumer protection laws governing financial products and services, including the Remittance Transfer Rule. The Remittance Transfer Rule requirements include: (1) a disclosure requirement to provide consumers sending funds internationally from the United States with pre-transaction written disclosures and receipts; (2) an obligation to investigate and resolve certain errors, including errors that may be outside our control; and (3) an obligation, upon a customer’s request, to cancel certain transactions that have not been completed. The CFPB has recently signaled greater scrutiny regarding consumer fees and disclosures generally, and stronger enforcement of the Remittance Transfer Rule specifically. We expect a heightened enforcement environment for remittance companies, especially regarding transparency of fees and exchange rates. Furthermore, the CFPB may be considering new restrictions or rules on such fees and disclosures.

In addition, under the Dodd-Frank Act, it is unlawful for any provider of consumer financial products or services to engage in unfair, deceptive, or abusive acts or practice (“UDAAP violations”). The CFPB has substantial rule-making and enforcement authority to prevent UDAAP violations in connection with any transaction involving a consumer financial product or service. As a larger participant in the market for international money transfers, we are subject to direct CFPB supervisory authority over our business. This includes the authority to fine and provide consumer restitution for violations and request information and data about our compliance activities. In addition, the CFPB requires that we track and respond to consumer complaints.

Similar laws, regulations, and supervisory guidance in the countries where we operate and those where we are licensed apply to our business internationally. These include laws, regulations, and supervisory guidance to provide disclosures, an obligation to investigate and resolve certain errors and complaints, and obligations to cancel certain transactions. In addition, there has also been an increase in the level and regulatory scrutiny of consumer protection laws, regulations, and supervisory guidance relating to ‘treating customers fairly’. These laws apply to our international business (including in the United Kingdom and the EEA). In the United Kingdom, the Financial Conduct Authority (the “FCA”) has issued, supervises, and enforces the Consumer Duty that places an obligation on firms to act to deliver good outcomes for retail customers.

Indirect Regulatory Requirements. In addition to the direct licenses discussed above, we also seek, obtain, and maintain additional licenses to support new products and use cases, and we also are subject to indirect regulatory requirements based on the requirements of our product partners. At the current time, none of the businesses supported by these indirect or new licenses are material to our business.

For an additional discussion on governmental regulations affecting our business, please see “Item 1A. Risk Factors—Financial Risks” and “Item 3. Legal Proceedings” in this Annual Report on Form 10-K.

Intellectual Property

Intellectual property and proprietary rights (“IP Rights”) are important to the success of our business. We rely on a combination of copyright, trademark, and trade secret laws in the United States and other jurisdictions, as well as license agreements, confidentiality procedures, non-disclosure agreements, and other contractual protections to establish, maintain, and protect our IP Rights, including our proprietary technology, software, know-how, and brand.

As of December 31, 2023, we owned six U.S. registered trademarks, two pending U.S. trademark applications, 112 foreign registered trademarks, and 29 pending foreign trademark applications covering the mark REMITLY, our collapsed Clasped Hand logo, REMITLY (+ Clasped Hand Logo), PASSBOOK BY REMITLY, 汇安易 (Hui Mei Yi in Chinese characters), and 睿每易 (Rui Mei Yi in Chinese characters). This includes six foreign registered trademarks for the REWIRE mark and REWIRE Logo resulting from the purchase of REWIRE (O.S.G.) RESEARCH AND DEVELOPMENT LTD. We are in the process of recording the assignment of the REWIRE and REWIRE Logo marks with the relevant trademark offices. We are pursuing additional trademark registrations to the extent we believe it would be beneficial and cost effective. Additionally, we own common law trademark rights in the above referenced marks as well as the REMITLY PROMISES DELIVERED (+ Clasped Hand Logo) mark in the United States and certain other jurisdictions where common law rights are recognized. We also own several domain names, including www.remitly.com.

We monitor our trademarks and service marks through watch services which notify us when applications for potentially conflicting marks have been filed in the United States and in other jurisdictions. We also enforce our trademarks, service marks, trade names, and domain names against infringing third-party trademarks, trade names, and domain names by sending cease and desist letters, filing complaints, and commencing administrative and other legal proceedings in the United States and various other jurisdictions.

In addition, we rely upon a substantial amount of intellectual property licensed from third parties, including under certain open source licenses.

We also seek to preserve the integrity and confidentiality of our IP Rights through contractual protections and appropriate technological restrictions, such as physical and electronic security measures. It is also our practice to enter into confidentiality and invention assignment agreements (or similar agreements) with our employees, consultants, and contractors involved in the development of intellectual property on our behalf. We also enter into confidentiality agreements with other third parties to limit access to, and disclosure and use of, our confidential information and proprietary information. We further control the use of our proprietary technology and intellectual property through provisions in our terms of service.

See the section titled “Risk Factors—Cybersecurity, Privacy, Intellectual Property, and Technology Risks” for a more comprehensive description of risks related to our IP Rights.

Privacy and Cybersecurity

Privacy Regulations. We collect, use, receive, store, transmit, disclose, and otherwise process a wide variety of data and information (including personal information and sensitive personal information) for various purposes in our business. This aspect of our business is subject to numerous laws, rules, regulations, industry standards, and other obligations in the United States and globally. Regulation and proposed regulation in this area has increased significantly in recent years and is expected to continue to do so. Our data handling is also subject to contractual obligations.

In the U.S., various federal, state, and local laws, rules, and regulations apply to the collection, disclosure, security, and other processing of personal information, including the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, the Federal Trade Commission Act, the Gramm-Leach-Bliley Act (the “GLBA”), and various state laws and regulations relating to privacy and cybersecurity. The GLBA (along with its implementing regulations), a federal privacy law that applies to financial institutions, like Remitly, restricts certain collection, storage, use, disclosure, and other processing of certain nonpublic or otherwise legally protected information, requires notice to individuals of privacy policies and practices relating to sharing such information, and provides individuals with certain rights to prevent the use and disclosure of such information. These rules also impose requirements for the safeguarding and proper destruction of such information through the issuance of cybersecurity standards or guidelines.

In addition to numerous privacy and cybersecurity laws and regulations already in place, U.S. states are increasingly adopting laws imposing comprehensive privacy and cybersecurity obligations, which may be more stringent, broader in scope, or offer greater individual rights with respect to personal information (including sensitive personal information) than foreign, federal, or other state laws and regulations, and such laws and regulations may differ from or conflict with each other. For example, the California Consumer Privacy Act, as amended by the California Privacy Rights Act of 2020 (collectively, the “CCPA”), broadly defines personal information, gives California residents expanded privacy rights and protections, and provides for civil penalties for violations and a private right of action for data breaches. A growing number of other states also have enacted, or are considering enacting, comprehensive privacy and cybersecurity laws that share similarities with the CCPA. There are also ongoing discussions in the U.S. Congress of a new federal privacy and cybersecurity law to which we may become subject if it is enacted. Additionally, the U.S. Federal Trade Commission and many state attorneys general are interpreting federal and state consumer protection laws as imposing standards for the online collection, use, dissemination, security, and other processing of personal information.

Internationally, many countries have established their own privacy and cybersecurity legal framework with which we, our customers, and/or partners may need to comply. For example, as a result of our presence in Europe and our service offering in the European Union, we are subject to the EU General Data Protection Regulation (the “GDPR”), which imposes stringent privacy and cybersecurity requirements. The GDPR includes numerous requirements and changes from previously existing European law, including more robust obligations on data controllers and processors and more fulsome documentation requirements for data protection compliance programs by covered companies. Failure to comply with the GDPR can result in fines up to the greater of €20 million or 4% of annual global revenues of the violator. The GDPR also imposes strict rules on the transfer of personal data to countries outside of the EEA, including the United States, in respect of which the European Commission or other relevant regulatory body has not issued a so called ‘adequacy decision,’ unless the parties to the transfer have implemented specific safeguards to protect the transferred personal data.

Moreover, following the exit of the United Kingdom from the European Union, the GDPR was transposed into U.K. law (the “U.K. GDPR”) as supplemented by the U.K. Data Protection Act 2018, which currently imposes the same obligations as the GDPR in most material respects. Failure to comply with the U.K. GDPR can result in fines up to the greater of £17.5 million or 4% of annual global revenues of the violator. However, the U.K. GDPR will not automatically incorporate changes made to the GDPR going forward (which would need to be specifically incorporated by the U.K. government), which creates a risk of divergent parallel regimes and related uncertainty. For example, in 2021, the European Commission announced an adequacy decision concluding that the United Kingdom ensures an equivalent level of data protection to the GDPR, which provides some relief regarding the legality of continued personal data flows from the EEA to the United Kingdom. This adequacy determination will automatically expire in June 2025 unless the European Commission renews or extends it and may be modified or revoked in the interim. We cannot predict how the U.K. GDPR and other U.K. privacy and cybersecurity laws, rules, or regulations may develop, including as compared to the GDPR, nor can we predict the effects of divergent laws and related guidance. Moreover, the U.K. government has launched a public consultation on proposed reforms to the data protection framework in the United Kingdom. This may lead to future divergence and variance between the two regimes.

Recent legal developments in Europe have created complexity and uncertainty regarding data transfers from the EEA to countries outside of the EEA in respect of which the European Commission or other relevant regulatory body has not issued an adequacy decision. Furthermore, the United Kingdom similarly restricts transfers of personal data to countries outside of the United Kingdom to countries such as the United States that the U.K. government does not consider to provide an adequate level of personal data protection. While we currently rely on the standard contractual clauses promulgated and recently substantially revised by the European Commission and the United Kingdom’s International Data Transfer Agreement (or the United Kingdom’s approved international data transfer addendum to the European Union’s standard contractual clauses) for such transfers, on July 10, 2023, the European Commission adopted an adequacy decision concluding that the United States ensures an adequate level of protection for personal data transferred from the European Union to the United States under the recently adopted EU-U.S. Data Privacy Framework (followed on October 12, 2023 with the adoption of an adequacy decision in the United Kingdom for the U.K.-U.S. Data Bridge). However, the EU-U.S. Data Privacy Framework (and the U.K.-U.S. Data Bridge) may be in flux as such new adequacy decision has been challenged, and is likely to face additional challenges, including at the Court of Justice of the European Union.

Additionally, many statutory requirements, both in the United States and abroad, include obligations for companies to notify individuals of data breaches involving certain personal information. For example, laws in all U.S. states require businesses to provide notice to consumers whose personal information has been disclosed as a result of a data breach. These laws are not consistent, and compliance in the event of a widespread data breach is difficult and may be costly. Moreover, states have been frequently amending existing laws, requiring attention to changing regulatory requirements. Furthermore, in July 2023, the SEC adopted new cybersecurity disclosure rules requiring public companies to disclose, among other things, a material cybersecurity incident within four days of determining that an incident is material. We also may be contractually required to notify consumers or other third parties of a cyberattack, cybersecurity breach, or other similar incident.

There are a number of pending legislative proposals in the European Union, the U.S., at both the federal and state level, as well as other jurisdictions that could impose new obligations in areas affecting our business. We expect that our efforts to comply with the GDPR, U.K. GDPR, GLBA, CCPA, and other regulatory and legislative requirements will continue to require substantial investments, including investments in compliance processes and technical infrastructure. In addition, some countries are considering or have passed legislation implementing cybersecurity requirements, including requiring local storage and processing of data or similar requirements that could increase the cost and complexity of delivering our services.

We are engaged in ongoing privacy and cybersecurity compliance and oversight efforts, including in connection with the requirements of privacy and cybersecurity laws, rules, regulations, industry standards, and other obligations. Many of these privacy and cybersecurity laws, rules, and regulations are subject to change, have uncertain and inconsistent interpretation and enforcement, and may conflict with one another, other requirements or obligations, or our practices or the features of our services.

For additional information about privacy and associated risks, see the section titled “Risk Factors—Cybersecurity, Privacy, Intellectual Property, and Technology Risks.”