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A new wave of disruptive remittance startups have sprung up in Asia, providing workers and families who need to send money overseas to support loved ones with a cheaper, and easier process than ever before.
Traditionally, workers sending money overseas could either withdraw cash from their banks and go to a Western Union or another money transfer agency, who would charge a sizeable admin fee, often at both the sending and receiving ends of the transaction, and use a marked-up exchange rate, or use their bank, incurring a cable charge of $20, handling commission, an uncompetitive exchange rate, and even, on occasion, a charge from the receiving bank.
But a new breed of digitally disruptive money transfer startups have the potential to consign these methods to history. Today, digital money transfer platforms use the live exchange rate that you can see on Google to determine the price of a transaction, often referred to as the “fair exchange calculator”, and charge much smaller handling fees – often as low as 0.25%.
The startups are able to charge such low fees because they have built up a network of local bank accounts around the world, enabling them to send money or use matching – netting off transactions to and from specific countries – to reduce costs and make transactions cheaper and more efficient to process.
The best thing about today’s money transfer startups is the transparency they provide – all the charges and costs associated with a transaction are displayed up-front, and customers can easily check the latest exchange rates on Google to make sure they are getting a good deal.
So, without further ado, we present 3 of the top money transfer app and platforms currently operating in Asia. Do you agree? Let us know in the comments section below.
InstaRem charges a fixed rate handling fee of just 0.25%, making it the lowest cost operator in the region, according to World Bank league tables. Transfers are generally completed in just 1-2 days, and the company also offer a bonus scheme for first time users, referrals, and a rewards based system to help its 50,000 plus customers save even more.
SingX only launched in January of this year, but has already grown to more than 6,000 users. The platform offers the same rates to customers that banks use to transact with each other – in other words, much cheaper, and with no hidden fees or charges. SingX charges a commission of just 0.5% no matter the size of the transaction.
TransferWise may have been founded in London, by 2 Estonia co-founders, but such has been its success it has expanded into Asia and the Far East. TransferWise has already gained more than 1 million customers worldwide. The company charges a small fixed fee plus a percentage for each transfer – which works out at a rate of around 0.5%, with a minimum fee of $2. TranferWise believes that this makes its service around 3 times cheaper in Asia than using your bank account to perform the same transaction.
These 3 apps are eating into banks and money transfer agencies market share of an industry estimated to be worth as much as $30 trillion. For more detail, read this article from Singapore’s The Straits Times.