History of money transfersOver the past couple of decades the need for transferring funds across borders has significantly increased. Numerous businesses pay employers and suppliers from other countries. International customers also send payments to them. Migrants are in need of remittance industry services on a continuous basis, and these numbers continue to increase. Fortunately, technology advancements have ensured that it is no longer bothersome, time consuming or expensive to make international fund transfers.

History

Since its origins in the ninth century the global remittance industry really has come a long way. At the time “flying money” was used by Chinese traders that were in paper voucher form that worked as proofs of payment. They served as a way of protecting against thieves. International money transfers did not take on a new forn until the industrial age had established itself. During the late 19th century wire transfers came onto the scene, and their popularity resulted in several different private non-banking companies being born that offered the service. Western Union and some of this field’s other pioneers still exist today.

At the turn of the 20th century is when the biggest changes took place. Using electronic transfer has greatly increased, and the medium now accounts for more than 90% of cross-border remittances. Moments after a transfer has been initiated by a sender a recipient may receive cash at a physical location.

The future looks even brights, with society embracing the concept of going cashless. With the rise of virtual crypto-currency platforms like Litecoin, Ethereum and Bitcoin, it might get even easier moving funds to another country.

International Wire Transfers

History of money transfersFunds are transferred electronically with a wire transfer, and one can be carried out through your bank. Different transfer systems might be used by various financial institutions and multiple options might be offered in terms of turnaround times and costs. For instance, in the U.S. centralized bank wire transfer tend to rely on RIGS (real time gross settlement) systems that provide irrevocable and real-time settlements.

Over the past few decades banks having been losing some of their share of global remittances mainly due to cost-effectiveness. However, another factor has been the amount of time that it usually takes for processing transfers. They are facing stiff competition from non-banking counterparts.

Specialist Money Transfer Companies

In 1872 Western Union began offering wire transfer services, through utilizing its existing telegraph network. The company now has storefront in several different countries, which gives individuals an easy way to receive and send money in several different ways. Ria, Azimo, MoneyGram and WorldRemit are some of the other popular services that have agents or physical locations. Although the wire transfer services that these companies offer are similar to what can be found through banks, they have a tendency to charge extra fees to be able to offer faster turnaround times.

Online Money Transfer Companies

Online Money Transfer Companies Several online FinTech companies have emerged, due to rapidly evolving technology and lower overhead costs, including CurrencyFair and TransferWise. The UK-basedFinTech unicorn TransferWise, for example, has been able to drive industry costs down successfuly through offering game changing services like low-fee multi-currency accounts.

Second Generation Mobile Phone Used For Exotic Currency Low Tech Remittance

Second generation mobile phones continue to be used by residents of several different South American, African and Asian countries. That offers a unique opportunity not only for businesses dealing in remittance of funds, but for some mobile phone network providers as well. Digicel, which is owned by Denis O’Brien, an Irish billionaire, currently operates within 31 markets across Oceania, the Caribbean and Central America. With approximately 14 million customers, Digicel is making inroads already within the micro insurance and mobile banking sectors.

Future Of Crypto Currency Remittance

BitcoinUsing crypto currency for global remittance has increased, and this upward trend is all set to continue. However, not everyone is as optimistic. It looks like for now that the depth of any market might impact the ability for exchanges to convert into and out of local exchanges in various global areas. this results in crypto currencies might not being appropriate for some of the more exotic currencies.

Conclusion

Without a doubt the rapidly developing FinTech sector will be defining the remittance industry’s future course. As consumers are becoming increasingly aware of what their various options are, it will mean that the industry will have to continue to evolve in order to provide services for matching its customers needs. Over the past two decades there has been a sea change in how money gets transferred across borders, and with the new multi-currency accounts, it looks like even better things are on the horizon.

Categories: Money Transfers

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