According to a 2016 research conducted by PwC, payment and remittance sectors are going to experience considerable disruption by 2019. The disruption will come from fintech firms that have invested great products in these sectors. Fintech money transfer takes two related but distinct forms which are collectively referred to as digital transfer;
- Mobile money transfer
- Online money transfer
Mobile money transfer is a form of peer to peer mobile payment that allows you to send and receive money via mobile phone. It is not necessary that the mobile phone is internet enabled. Mobile money transfer is centred on the concept of mobile money or digital wallet. A digital wallet allows you to keep, send and receive money using a mobile phone. A good example of a mobile money transfer service provider is M-pesa that is owned by the UK’s telco, Vodafone. Currently, it is in operation in several African countries, India, Afghanistan and Romania among others.
Online money transfer combines the old concept of wiring money with the recent concept of electronic funds transfer. Electronic finance transfer involves the transfer of money from one bank account to another. It is only data that is exchanged. No paper money changes hands.
Online money transfer is a more advanced version of electronic finance transfer and involves an instantaneous transfer of money from one person to another. You only need the contact information of the other person such as an email address or a phone number that is linked to their bank account. Usually, a secure web-based service provider will allow you to do online money transfer from their website for a small fee. You only need to have internet access, no need to go to a bank, a money wiring agent or a telegraph station. Some of the online money transfer service providers are:
Online money transfer has a number of advantages. These advantages include:
- Fast Transfer
With the online transfer, you can send money in seconds. You only need to log in and send the money hustle free.
- Multiple Payment Options
Most online funds transfer service providers will offer several payment options. Whether you want to do a bank transfer or a cash payout you are well catered for.
- Affordable Charges
Online money transfer service providers offer very friendly rates. They charge a small amount as compared to what you would otherwise pay using the traditional money transfer methods.
- Safety and Security
Online money transfer is one of the safest modes of remittance. Usually, the service providers have very secure systems that keep your money and your account details safe. Many of them use encryption technology such as SSL to ensure that at no time do unauthorized persons access your details. This diminishes the possibility of fraud and theft.
With the continued investment, fintech will eventually entirely transform the remittance experience as the legacy banks will have to adopt the new methods or risk losing their market shares.