By Kate Sands from 6XDMEDIA.
Global money transfers, also known as remittances, have increased significantly in the last two decades with the help of fintech, which is making it easier for businesses and individuals to transfer money internationally. Let’s explore the three significant links between fintech and global money transfers.
1. Simplified Access
Electronic money transfers originated in the 19th century with the introduction of telegraph wires in the USA, but it was the internet in the 1980s that revolutionized global remittances. Companies like PayPal led the shift towards quick online money transfers, allowing consumers to send money globally from the comfort of their homes. The advancement of smartphones and apps has further enhanced accessibility, enabling instantaneous transfers using mobile devices.
2. Reduced Fees
Fintech has accelerated digital money transfers, leading to cost savings for companies, which are often passed on to consumers in the form of reduced fees. Additionally, favorable exchange rates are more accessible, helping consumers avoid high currency conversion costs. The UN aims to decrease migrant remittance costs to less than 3% by 2030, and fintech is expected to play a crucial role in achieving this goal.
3. Increased Market Competition
The growth of fintech has introduced more competition in the remittance market, with new businesses offering innovative digital money transfer services. This has challenged industry giants like Western Union, propelling fintech innovation as companies strive to provide the most convenient and affordable remittance services to consumers.
Fintech’s Impact on Global Money Transfers
Fintech’s advancements, including blockchain, AI, and digital wallets, are reshaping the remittance landscape by streamlining transactions and reducing costs associated with traditional methods. This progress is essential in meeting the rising demand for seamless cross-border transactions in a globalized world. Furthermore, fintech’s innovations are not only enhancing user convenience but also increasing accessibility in underserved regions, redefining the remittance landscape to be more inclusive and affordable.
