Remittances have always been essential in pushing the recipient country’s economy forward. People from Low-Income Countries (LICs), also known as the developing or underdeveloped, go to developed countries to earn a living. From there, these expatriates send back their remittances through international money transfer services such as ACE Money Transfer.
Here, you’ll see the impacts of remittance on the economies and their role in strengthening them. But, it is also necessary to learn and understand Financial Technology (FinTech) and its importance.
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Role of remittances inflows in economic strength
Following are the ways how remittance inflows affect economies to be better.
Replacement of foreign aid
The World Bank’s 2019 Migration and Development Brief records that the remittance flow was the highest in the low- and middle-income countries at $529 billion in 2018.
Smooth flow to keep the economic wheel running
Foreign aids face many official bottlenecks because they take a long time to bear dividends and reach the poor and deserving. Against this, remittances have a household-to-household feature. It keeps the flow smooth and speeds up the access to its economic dividends. Dilip Ratha, a lead economist and expert on migration and remittances at the World Bank, describes remittances as “dollars wrapped with care”.
Direct effects of remittances
With the help of remittances, the recipients address their issues of meeting basic needs like food, sanitation, education, etc. It reduces the poverty level in society.
Investing remittances in small businesses, health and education, etc., increases human capital and circulates money. It augments long-term economic growth. These activities create employment opportunities and uplift the economy at a micro and macro level.
Pushing the industry into life
One of the most significant positive impacts of remittance inflows into a country is that the recipients prefer to invest in property, constructions, etc. And you know that several industries are tightly attached to the construction industry alone, including sanitary, labour, electricity, etc. In this way, remittance inflows generate immense work opportunities that help the recipient country wear an overall healthy economic outlook.
FinTech industry’s background and role in economic development
Let’s now understand the core concept of FinTech associated with economic growth.
Understanding Financial Technology – FinTech
Combining the terms ‘Financial’ and ‘technology’, FinTech is the newest way of moving funds worldwide due to rapid technological advancement.
The basic concept of FinTech is to help companies, businesses, individuals, etc., smartly manage their financial operations. For this, specialised software and other tools are available aplenty on computers. But, over time, people are increasing their smartphone usage for the same purpose, more so with the launch of a user-friendly international money transfer app for expatriates by ACE Money Transfer.
Now, let’s see how FinTech is helping the countries’ economic development.
FinTech and economic development
The primary reason for the economic stagnation of a country is that the money does not circulate viably. Look closely, and you will realise that the countries with a weak economy have their wealth concentrated in the hands of a few. In fact, globally, the world’s wealth is in the grip of a few hands with the fallout of economic woes the developing countries face.
In this context, the inbound flow of remittances holds immense importance. With the flow of remittances, the money keeps circulating.
The role of FinTech in this regard cannot be overemphasized. These technologies increase remittance flow without any delay in the movement of the funds. Credible online money transfer companies, including ACE Money Transfer, have devised the best way to transfer money internationally. It enables expatriates to send money from anywhere in the world to any other place within just a few clicks and in a matter of a few minutes.
And the more the flow of remittances increases into a country through FinTech, the better the chances of economic growth and development. FinTech keeps the flow of remittances going smoothly. It does not allow the economy to stagnate, as explained earlier.
Now, let’s look at the best ways to send money online in the current era.
Best ways to send money online today
Following are the few best ways to send money online, explained briefly.
Wire transfer or bank transfer
This method is one of the oldest online money transfers overseas and domestically. People still use this method to transfer their funds as the banks still command the people’s trust by subscribing to their services. And this trust increased in the wake of online scams and money thefts that have taken place in the remittance industry. Many unscrupulous elements crept into the remittance transfer industry leading to online scams and thefts. Therefore, despite the fact that many credible and trustworthy online money transfer service providers like ACE Money Transfer are offering quality services, many people still use bank transfers.
Bank transfers or wire transfers are generally expensive as the banks charge a considerable fee. And the other issue people usually complain about in wire transfers is that they are too time-consuming. Imagine that a typical wire transfer will take about 3 to 5 and even more business days to complete in certain cases. It makes it difficult for the expatriates to send their remittances timely.
Companies dealing in remittances
These companies typically operate based on FinTech. For your better understanding and convenience, we have categorised these into the following three categories.
The remittances companies are the best option for moving funds quickly. And perhaps, no one in today’s fast world will want to finish their work slowly.
Online money transfer smartphone apps
These apps operate solely based on FinTech. These apps are convenient, and the one launched by ACE Money Transfer enables its users to initiate, track and complete an online transaction right from the middle of their comfort zone or on the go!
Remittance or currency brokers
Here, the use of technology is more diminutive. It is a person-to-person money transfer system. Due to security issues, many people are still reluctant to send large amounts of money overseas online. No matter whether the online money transfer method is devised by the companies providing the best international money transfer services, a small percentage of the people are still reluctant.
Let’s now see some remittance transfer needs for FinTech companies.
Needs of remittance transfer for FinTech companies
The companies that offer FinTech to transfer remittances have the following on offer. These have become the needs of the remittance service providers.
Speed and efficiency
The first need is to transfer funds from one place to another quickly and efficiently. One of the greatest physicists, Stephen Willaim Hawking (now deceased), said that the speed would decrease accuracy and efficiency. Of course, it was in a different context, but it will be equally valid even if applied to the movement of remittances.
But, some of the best companies, including ACE Money Transfer, have set up mechanisms that ensure speed, accuracy and efficiency in moving remittances.
Low service charges
With the help of FinTech, the remittance service providers can charge remitters a low fee. But, it is not the universal rule that remittance companies get a low cost from the remitters. There are only a few companies that have this feature. Most companies charge their customers a massive fee for transferring money internationally.
Best currency exchange rates
The remittance service providers such as ACE Money Transfer have used FinTechs to link their currency exchange rates with the international market, where these keep fluctuating. It is possible with the help of FinTech, and ACE Money Transfer has made optimal use of FinTech in this regard.
ACE Money Transfer allows its customers to choose a time for the transaction when the rates are at their highest by linking its currency exchange rates with the ever-fluctuating international rates.
Security of online transactions
One of the most extensive needs is to secure online transactions in the wake of rising online scams and money thefts. FinTechs have played a considerable role in ensuring that online transactions are secure and cannot be breached by online scammers. It could not have been possible if FinTech were not as developed as today.
Let’s now take a quick look at the top remittances providers for FinTech companies.
List of the top five remittance providers for FinTech
- ACE Money Transfer
Best remittance transfer service provider
ACE Money Transfer is one of the leading remittance service providers as it offers the best exchange rates, low transfer fees, and 24×7 service availability with broader access. ACE has an operational presence in over a hundred countries to help the beneficiaries receive funds that expatriates send to them from overseas.
Many other features set ACE apart from its peers in the market. And by looking at all the features, you will realise that the best way to send money abroad is with ACE Money Transfer, given the best quality services it offers to its valued customers finely blended with exceptional ease and convenience.