The impact of fintech platforms on cross-border money transfers is undeniable. These platforms have revolutionized the way we send and receive money across borders, thereby expanding the global reach. As fintech continues to advance, we can expect greater convenience and efficiency in cross-border financial transactions.
Fintech and Beyond: Cross-Border Money Transfers in the Digital Era
With the rise of fintech platforms, the process of sending money across borders has become faster, cheaper, and more convenient than ever before. Let’s understand the role of fintech companies in shaping this evolving landscape.
Transparency in Exchange Rates
One of the defining factors in cross-border transactions is the exchange rate. Unlike conventional options like banks, FinTech platforms provide transparent and live exchange rates, often closely aligned with base rates. This transparency ensures that users get the best value for their money, as opposed to banks, which may offer less favorable rates with hidden margins.
Reduced Transaction Costs
FinTech companies have disrupted the banking industry in India by adopting a budget-friendly approach. While traditional money transfer services impose exorbitant transfer fees ranging from 1000 to 1500 INR per transfer, FinTech platforms often offer minimal or zero transfer charges thus making it more cost-effective for individuals to Send Money Abroad.
The convenience of the process is a key differentiator between banks and FinTech platforms. While few banks may require in-person visits, extensive paperwork, and a time-consuming initiation process, FinTech platforms offer a 24×7 online booking option for international money transfers. This shift from physical branches to online platforms has redefined convenience, allowing users to initiate and complete transactions from the comfort of their homes or offices.
Faster Transfer Speed
Waiting for days or sometimes even weeks for cross-border transfers can be quite frustrating. Fortunately, Fintech platforms have significantly reduced transfer speed, enabling individuals to transfer funds overseas much faster i.e. within 12-48 business hours. This faster transfer speed is especially useful in time-sensitive situations, such as medical emergencies or urgent funds needs abroad.
Navigating the complexities of international money transfers often requires expert assistance. FinTech platforms excel in this aspect, with dedicated remittance specialists providing seamless support to customers. This stands in contrast to traditional options, where finding staff well-versed in international remittances can be a challenge. The customer-centric approach of FinTech platforms ensures a smoother and more efficient experience for the end users.
Enhanced Security and Regulation
Financial security is of utmost importance when dealing with cross-border money transfers. While traditional banks boast a long-standing history, FinTech platforms have rapidly built trust through the implementation of robust security measures and strategic partnerships with banks. These partnerships ensure that users’ funds are held and transferred through reputable financial institutions, ensuring that transactions are conducted in a secure and compliant manner.
Rate Lock Feature
A notable feature exclusive to many FinTech platforms is the rate lock option. For instance, the “Book Now & Pay Later” feature available on the reemodyshop platform allows users to freeze desired exchange rates for up to 3 days, providing flexibility and control over their transactions. This feature is absent in traditional banks, where users often have to make immediate payments at prevailing exchange rates.
|Fintech Platforms like BookMyForex
|Banks/Offline Money Changers
|1. Provides Transparent and Live Exchange Rates
2. Rates Get Updated Every Few Seconds
|1. Provides “Fixed Exchange Rates of the Day” to Counter Rate Fluctuations
2. No Transparency in Rates
|1. Service Charges: Zero,
2. Bank Charges: Zero,
3. Nostro Charges: 1200-1500 INR depending on the currency & amount
|1. Service Charges: INR 250-500,
2. Bank Charges: INR 1000-1500,
3. Nostro charges: INR 1500 depending on the currency & amount
|Convenient Booking Option
|1. 24*7 Online Booking Option Available
2. Book Online in Just a Few Minutes
3. Simple Documentation Process
|1. Mandatory In-Branch Visit
2. Inconvenient & Time-consuming Process
3. Lengthy Documentation Process
|Faster Transfer Speed
|12- 48 Business Hours
|Up to 24-72 Business Hours
|1. Remittance Specialists to Assist Customers
2. Both On-Call and Online Customer Support Available
|1. Limited Forex-specialized Branches
2. Lack of Dedicated Staff to Assist Customers
|Enhanced Security and Regulation
|1. Trusted Fintech Platform
2. Compliant with Financial Regulations
3. Employs State-Of-The-Art Encryption Technology
|1. A Reputed Financial Institution
2. KYC and AML Procedures Followed
3. Multi-Factor Authentication
|Rate Lock Feature
|1. Book Now & Pay Later Option Available
2. Lock-in Desired Rates for up to 3 Days
|1. Book Now & Pay Later Option Not Available
2. Lesser Flexibility and Control over Rates