Challenges Sending Money Overseas Remain, Despite Increase in Remittance Technology
A recent study released byJuniper Research suggests mobile remittance will exceed $25 billion by 2018, an increase of 67% from the $15 billion seen in 2015. As a result, significant development in the FinTech industry has spurred a number of new startups and led to the creation of new technologies aimed at helping consumers send money overseas cheaper and faster.
However, despite furious innovation, the "last mile", or the process by which remittances are received and utilized by the recipient overseas, still creates a significant hurdle in the process of sending and receiving money internationally. While new technologies have made significant improvements in the process by lowering fees and increasing the convenience of sending money abroad, a missing link still exists on the receiving side of the market, making new technology obsolete for some users.
In many cases, the target audience does not have access to the technological innovation required to complete the transaction or make the transfer valuable. For example, in India, recipients living in rural parts of the country likely don't have access to merchants accepting mobile payments and may not have the means to connect the mobile technology to a card system to withdraw the cash, causing an operational gap. According to the World Bank, India remains the largest recipient of remittances.
Rod Hsu, president of mobile money platform nTrust, recognizes the importance of innovation but stresses the need to match new-world technology with that of developing nations.
"Start-ups and mobile money platforms need to look at the behavior and access of consumers in each market," says Hsu. "Is it mobile credits and SMS that people are accustomed to and using day to day? Or, are they lining up at pawnshops because it's the most accessible in their specific areas of the country? Until there is a radical shift in the last mile technology and access, companies need to be realistic and consider bridging the current gap rather than coming up with the most innovative product."
Despite the current challenges, the market for a more cost-effective and quicker alternative exists. Although many developing nations aren't yet prepared for an entirely digital ecosystem, the mobile money industry is on the tipping point, making it only a matter of time before greater financial evolution and inclusion is achieved.
nTrust is a rapidly growing online and mobile money transfer platform that helps people around the world instantly move and access their money. Using nTrust, members can send money to friends, cash out to their bank account, spend money through their phone, or load funds to a prepaid card to use anywhere the MasterCard® Acceptance Mark is displayed, online or in-person. nTrust's proprietary technology uses the highest encryption standards and is "PCI-DSS Level 1" certified, which remains the top global standard for operational and technical security designed by Visa, MasterCard®, and American Express.