Online remittance: transfer money anytime, anywhere
Remittance is the service of transferring money, typically from one country to another. It is a service that has been around since the 19th century and it is one that continues to grow year-on-year as more people migrate to foreign countries to work.
According to World Bank, remittances to developing countries are expected to see a slight increase this year amidst the current weak global growth. And remittances to low and middle income countries are expected to increase 0.8% to US$442 billion (S$614.82 billion). This is with the help of startups coming into the market to meet the needs of the lower income groups.
Remittance anytime, anywhere
Traditional remittance often come with high fees and low foreign exchange rates, while the receiving end (usually families of migrant workers) would need to commute long distances and go through tedious paperwork just to receive money.
Let’s not forget that there is also the issue of safety when travelling in urban areas with large sums of cash in hand.
Thus, online remittance has become increasingly popular as it provides a more convenient and safer international money transfer process. With the old remittance process, those who wish to transfer the money would have to pay exorbitant processing fees which would eat into the total sum transferred.
Now, with online remittance, it is more transparent when it comes to its fees.
There are many online remittance platforms that can help transfer money across borders in several ways. These methods often come with lower processing fees and better foreign exchange rates.
Tech-savvy foreign employees
Hop on the MRT or the bus and everyone is constantly on their smartphone devices. This includes the migrant workers in Singapore. So, it is a natural progression for remittance to also go largely digital and increasingly more self-service oriented.
The introduction of mobile apps and web platforms with remittance features provide foreign workers an easier, faster and cheaper way of transferring foreign currency.
Online remittance in Singapore
In Singapore, there are a number of players that offer attractive and simple online remittance services. Here they are:
Transwap is a Peer-to-Peer Currency Exchange Platform that matches a user’s foreign currency needs with other users. It allows users to seamlessly exchange foreign currencies at the mid-market exchange rate with a transaction fee of only 1% of the amount being transferred, saving users up to 80% in transaction costs as compared to intermediaries.
Part of The FinLab accelerator programme, Nickel has developed a proof-of-concept technology using blockchain technology to help migrant workers send remittances to their family for a low processing fee of only S$8. Nickel has developed a mobile app to build a system that will also help the region’s SMEs in efficiently making foreign exchange payments at a low FX rate.
DBS has also hopped on the online remittance band wagon and is offering competitive and locked-in FX rates round the clock and same-day transfers when transferring money online to Malaysia, China, India, the Philippines, Indonesia, Hong Kong and UK. Their fees are as low as S$0 and the transfers can be made anytime and anywhere via iBanking or the digibank mobile app.
Sending airtime is simple and quick using WorldRemit. Transfer foreign currency to 100 different countries via the WorldRemit website or via their mobile app. The money can be sent to bank accounts, for cash pickup, to a Mobile Money service (sometimes called mobile wallets) and as a mobile airtime top-up. A processing fee applies too, however it is included in the total you need to pay. For example, A transfer of RM5 of airtime from Singapore to a Malaysian number would cost S$2.49, estimating about S$0.90 of processing fees.