Until the beginning of 1990, most people working overseas depended on banks and other forex brokers to send money home. Bank transactions often take time and are quite cumbersome to follow up. Forex brokers on the other hand charge high prices making them an inconvenient choice. Luckily, the rise of financial technology has made it easy to transact and send money globally with just a touch of your smart device. Read on to learn about the rise of currency transfer fintech companies.
How do Fintech Money Transfer Companies Work?
The money transfer companies utilize the technology used by bigger financial institutions such as banks. The technology is then integrated into mobile applications, social platforms, and e-wallets. Ideally, fintech aims at making financial services affordable for consumers. A currency converter allows the companies to convert any currency into what the client needs.
Facts about Currency Transfers
According to the World Bank, about $450 billion is sent back to developing countries by immigrants working abroad every year. It is even estimated that remittances sent home by immigrants might rise to about $550 billion this year. If you decide to use a bank or a broker, the transfer fees range between 5-8 per cent of the total amount. In most cases, the costs are hidden within the exchange rate so that customers do not even realize they are paying for the transfers.
Within the last decade, people wishing to send money abroad have had a variety of alternatives. Even though some people still depend on banks for transfers, most people have shifted completely to using fintech companies. Here is why:
• More accurate exchange rates
More accurate exchange rates imply more money for the customers. Previously, banks and other large financial institutions offered poor exchange rates, buying a currency at one rate and selling it at another. This made it expensive to transfer money. Fintech companies, on the other hand, operate through very scalable online platforms and apps, meaning they do not need to be pay for expensive bank offices and can afford to offer competitive exchange rates which benefit the customers.
Smart money transfer allows you to send money using your smartphone, tablet, or even the computer. You, therefore, don’t have to take a trip to your bank for the transaction. This means more freedom and convenience which at the end of the day is what every consumer wants.
Depending on the method of transfer you use, it is possible to send the money within a day or even a few hours. Fintech firms have managed to leverage technology to ensure that money gets transferred within the shortest time possible. The big players in the field, such as WorldRemit and TransferWise allow you to send money instantly such that the recipient gets it within a few minutes. Unfortunately, bank transfers and even established FX services still take many days for the recipient to receive the money.
• Variety of options
Fintech companies allow customers to choose from a variety of options. However, the most popular is the bank account transfers. Some companies even allow you to transfer from debit and credit cards at an extra cost.
The credibility of Money Transfer Companies
Most fintech companies guarantee safety against fraud. You can rest assured that as you transact, your data will be safeguarded. Still, the money will get to your family or friend within the shortest time possible. WorldRemit and Azimo for instance, guarantee safety, speed, and low charges. These brands even have cash pickup points where your recipient can collect the money a few minutes after you send it. Sounds good? I bet it does.
What’s more, is that you can even look up some online user reviews and ratings about these companies here. These reviews will give you an impression of customer experiences and whether you can have confidence in the money transfer services and whether experienced some complications. You will need to have a currency converter to ensure that you send the exact amount you want to.
Currency transfer fintech companies have increased rapidly within the past few years. This is because they offer you the convenience, speed, low fees, and many transfer options. Many immigrants working abroad often finds the need to send money back home. Previously, banks and other brokers charged hefty fees for transfers which took a toll on most people. WorldRemit is ranked among the best transfer companies in the world.