International transfer of money has been an expensive and arduous task for the longest time. From hidden charges, manual paperwork to dealing with a long chain of middlemen, the hurdles in the way were too many to count. However, the situation has changed remarkably in the past few years. Now, small to medium sized business and individuals get to enjoy cheaper, faster, and value-added foreign money transfer services, which are all the benefits that once only the governments, banks, and large corporates used to enjoy as they had the direct access to theforeign exchange market.
The role of international organizations in affecting the MTOs
MTOs (Money Transfer Operators) are the organizations that facilitate international payments and transactions by accessing cross-border banking networks or through their internal systems. International money transfer is generally referred to as remittances, and, it includes all the current transfers in kind or in cash between non-residents and residents.
At present, the fees of international money transfers through MTOs are falling because of the pressure from international organizations like UN and G20, which are targeting to keep the average cost at 3% and 5% respectively. These organizations pay special attention to the remittances market because of its popularity with the low-wage earners and the role played by remittances in the economic growth of the emerging markets. At present, 6% is the average fees that arecharged by the MTOs.
Other factors that help in bringing down the fees
New players coming into the market are increasing the competition for the Money Transfer Operators, as these new entrants use fees as the main differentiator to uphold their position in the market. In fact, with the MTOs building the business models purely on digital platforms, they have lower fixed costs and their cleaner, modern technological operational channels offer the quick turnaround time to the consumers.
With the industry increasingly resembling that of a commodity market in terms of its characteristics, the traditional players need to look for better ways to make themselves standout from the competition. It can be anything like payroll service for the businesses, prepaid debit cards, and so on. Though all these changes and new ideas can be difficult to implement by the traditional MTOs, it is good news for the consumer because what they are getting is more utility and choice.
Efforts towards widening the scope of services of the MTOs
The steps that the MTOs have taken towards widening the scope of services also deserve a mention when discussing about the evolution of international money transfer market. At present, most of the MTOs offer virtual bank accounts to the customers that let them get paid directly through the third parties and then the distributions are made to the physical accounts through traditional transfers. The natural progression of the strategy would lead to NFC pay services or physical cards that would enable the businesses to get hold of day to day transactions of the consumers instead of their one-off transfers.
Value-added services are the latest in-thing in any market now, and even the international money transfer market is not immune to it. If both the established players and the new entities are able to cash on that through effective use of customer data, then attracting more customers and keeping them happy would not seem too difficult.You can log in to the linkto know more about this matter.
All said and done, if there is one thing that everyone can agree on, it is the fact that international money transfer market has undergone a vast change from what it started off as. Also, it can be safely assumed that with each passing year, consumers will get to see more positive changes.