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Fintech of financial technology has changed the
financial services sector in many ways. Globally, migrant workers remit
billions to their home countries. International remittances form a considerable
chunk of the GDP in some countries.
It is costly to remit funds via money transfer
operators or banks. Most people lose a lot of money through transaction charges
and hidden fees. Fintech and money transfer applications have helped by cutting
down on transaction costs. Fintech applications, for these reasons, have become
very popular for international money remittances.
Fintech has considerable benefits in comparison to the
typical money transfer methods. FinTech has proven to be of great interest to
all users. This technology has significantly reduced costs and time spent while
sending money and other digital services.
Benefits of international money transfer are:
Faster
than banks
The significant advantage of using fintech applications
for international remittances is that the process is faster than a bank. Banks
usually take several days to make a transfer. A fintech application uses the
newest technology to facilitate the transfer. It offers a user the option to
choose the fastest method to remit the money.
Lower
cost
Fintech application charges a meager processing fee in
comparison to the fee charged by banks. Many fintech companies have zero
processing fees for selected areas. Fintech companies steer away from hidden fee charges, cancellation fees, or
amendment charges like money transfer operators and banks.
More
flexibility
Fintech international remittance options are very
flexible. They allow the user to send money from anywhere on the globe by only
using a web browser or mobile device. While you can make online money
transfers, these applications also provide alternatives such as sending money
via physical locations or mobile phones.
Great
exchange rates
Fintech companies have high exchange rates, making them
a more attractive option for those sending or receiving money. Some years back,
before the advent of fintech companies, only banks, and critical financial
institutions had access to the exchange rates. Fintech companies have made
exchange rates accessible to the average citizen.
Convenient
features
Fintech applications offer convenience in the form of
forwarding contracts, schedule payments, limit orders, and spot deals. These
features ensure you get reasonable exchange rates, enabling more money remittances.
Transparency
Fintech companies have brought transparency into money
transactions. Money senders, as well as receivers via different money
remittance apps, are kept updated in real-time. The remittance solutions ensure
they follow all security channels to ensure every transaction is secure.
The user might want to download a VPN
(virtual private network) to create a secure tunnel between the user’s device
and the internet. The VPN allows the user to browse incognito while encrypting
any data sent over the internet.
Different
payment methods
Fintech money remittance companies offer their clients
different payment methods to choose from. Payment via bank account is the
cheapest. Some companies do not accept payment via credit or debit cards. If a
company does accept card payment, they usually charge an added fee. Some
payment methods include Google Pay, ACH, and Apple Pay, etc.
More
pickup locations
Some of the older money remittance players such as MoneyGram and
Western Union still have a big slice of the market in terms of cash pick up
transfers. Fintech is making headway in this sector. Few fintech companies have
pick up locations or physical agent network, but some options include Worldremit
or Ria.
Multicurrency
Accounts
Fintech money remittance companies offer multicurrency
accounts such as Transferwise and Worldfast. They serve small to midsize
businesses, online freelancers, sellers that have international deals.
A multicurrency account gives the
user free receiving account details from multiple countries. This means one can
receive remittances from a parallel currency without thinking about the
exchange rates. For example, you may live in Europe, but still, get paid in
dollars, straight into your dollar-denominated account. You can then withdraw
into your local account if you so wish.
Conclusion
Fintech has completely changed the financial services
sector. It poses a considerable threat to banks and financial institutions.
Until banks can match the fintech companies’ rates, they will continue to lose
clients to the fintech companies, which offer better rates to clients.
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