For the longest time, sending money abroad has been a major challenge for many people. The delayed transaction times, exorbitant charges, and increased security risks all contribute to the inefficiencies of cross-border remittances. However, thanks to technological innovations, you can now securely transfer funds to business partners and loved ones in other countries. These innovations are mostly due to the rise in remittance flows worldwide.
Novel technologies like blockchain technology and virtual accounts are steadily disrupting traditional cross-border remittance models. As a result, there is now access to faster and more affordable options for the already banked and unbanked populations.
In this post, we’ll explore recent trends in international remittances and examine key innovations in the industry. Let’s get started!
Challenges Facing International Remittances
If you have used a traditional remittance system to send money abroad, then you must be familiar with the challenges people face. Here are some of the most common challenges that come with international transfers:
Slow Transactions
Speed is vital when it comes to money transfers. Recipients need to be assured that they won’t have to wait for days before their money is credited into their accounts.
If you’re looking for a swift and immediate transfer option, using an app like Changera is the way to go. Wire transfers usually take a while before they go through.
High Costs
Generally, cross-border payments are notoriously expensive due to the number of intermediaries involved in transferring money across countries. Choosing the wrong money transfer service can result in you paying more expensive fees than normal. Hence, it is important to know the best services to use for your international transfers. When it comes to international transfers, Changera offers the best fees without additional or hidden charges.
Security Concerns
All businesses want to make secure digital transactions for cross-border payments. Unfortunately, there is always the risk of fraudulent attacks in international payment processes. One single weak point can be used for stealing money before it enters the payee’s country.
One major problem with cybersecurity is that the regulations for every country can be different. As a result, there is no guarantee that both countries involved in a particular transaction will use the same security standards.
Emerging Players in the Cross-border Remittance Industry
There’s no doubt that there is a massive shake-up happening in the cross-border remittance landscape. This is all thanks to the rising technology and new business models focused on improving access and reducing fees. In a few years, traditional international remittances flow could become relegated due to these uprising forces.
Let’s take a look at some of the most notable new key players in the cross-border remittance industry.
Fintechs
These days, numerous financial technology companies are seeking to improve the current cross-border transaction system. So far, they’ve been able to achieve significant progress by optimizing foreign exchange, lowering fees, and offering faster transfers. All these are done via streamlined digital platforms and mobile apps with improved user experience.
Cryptocurrency and Blockchain
Cryptocurrency and blockchain technologies allow for direct peer-to-peer money transfers worldwide via web-based exchanges. Although it is still a small share of cross-border remittance, crypto offers advantages such as instant settlement, lower fees, and elimination of intermediaries.
Microfinance Institutions
Recently, there has been a notable rise in the establishment of microfinance institutions. These institutions offer affordable international money transfer services and disrupt traditional money transfer operators.
Additionally, microfinance nonprofits are facilitating international transfer services for migrant workers sending money back home. Finally, the localized networks of microfinance institutions provide personalized outreach and financial education.
Mobile Money Services
When it comes to emerging trends in cross-border remittance flows, we can’t dispute the importance of mobile money services. Mobile money services are taking off in emerging markets, catering to the underbanked via mobile phone and agent networks. These services offer fast, affordable international remittance services at the tap of a button on your mobile phone.
Payment Gateways
Payment gateways are unlocking cheap, secure, and swift cross-border money transfers, disintermediating traditional remittance providers. For example, payment gateways like Changera allow small businesses and merchants to accept international payments online easily. They enable e-commerce remittances and form an essential part of the fintech landscape.
Innovations Driving the Revolution of Cross-border Remittance Systems
The current trends signifying the growth of the cross-border remittance industry are largely due to the emergence of technological innovations. Startups and existing financial institutions are integrating these technologies to remain competitive. We’ll take a brief look at some of these innovations:
Artificial Intelligence and Data Analytics
Artificial intelligence and comprehensive data analytics help to optimize routes, exchange rates, and transaction fees. Companies do this by factoring in real-time data like currency fluctuations and transaction costs.
In the same light, machine learning improves compliance screening and predictive models to improve overall cross-border payments.
Digital Identity Technology
Digital ID verification using eKYC and biometrics expands access to banking services by replacing in-person ID verification. As a result, there is faster onboarding and enhanced security. For instance, Changera uses KYC verification to securely onboard users in seconds without any paperwork.
Open APIs
Open APIs promote connectivity and interoperability between various cross-border money transfer solutions. This allows users the flexibility of making a choice that suits them best.
User Experience Design
Factors that differentiate newer players in the cross-border remittance industry are the interactive and intuitive mobile apps. These apps provide easy checkout experiences thereby making them eligible options for the majority. UX innovations like designing for local contexts and promoting social sharing encourage customer satisfaction and ultimately, retention.
Takeaway
The cross-border remittance industry is undergoing impressive changes driven by emerging technological innovations. These innovations provide long-term solutions to common challenges that usually face cross-border transfers. From cryptocurrency to mobile money platforms, and AI, innovation is unlocking new opportunities.
Individuals can now send money easily to friends, family, and loved ones abroad without fear. Likewise, for businesses, this transformation provides a means to meet international remittance needs in impactful ways.
Changera is a leading fintech company that provides money transfer solutions to customers globally. With the array of services it offers, it is safe to say that Changera is changing the international payments landscape. These services range from virtual accounts, international money transfer features, and multi-currency wallets, amongst others.
Experience the future of remittances with Changera. Download the Changera mobile app from the Google Play Store and the App Store to get started.
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