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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.
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.
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.
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.
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.
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.
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.