The latest revolution of cross-border remittance

Through the development of technology, we have seen a big change in cross-border remittance from traditional ways to using modern 4.0 technology. Some articles by FinFan about “Send money from … to Vietnam”, we can know this remarkable transition.

Through the comments from the above articles, it can be seen that the progress of science and technology has greatly facilitated the process of promoting the speed and convenience of transferring and receiving remittances across borders.

In this article, we will look at the most recent developments and advances in cross-border remittance, as well as the fundamental causes driving change and the potential impact on individuals and organizations globally.

From traditional to digital remittance

Like we said above and through our articles on FinFan blog about Money Transfer. The senders and receivers nowadays can transfer money across borders more easily and faster at a lower cost.

Moreover, they can do everything with only 3 or 4 steps by using just mobile apps or some detail filling on the websites of the cross-border remittance companies. Simultaneously on these apps and websites, they can watch their transactions in real-time, receive quick notifications, and view detailed transaction histories, which increases trust and peace of mind.

These platforms also give the customers offer value-added services such as bill payments and cell top-ups, which improves the client experience even further.

During FinFan’s development, we always find out and connect with these technological companies to bring a better way for senders and final recipients.

At present, senders only need a few steps by using apps or websites to send remittances back to their relatives in their hometowns with lower fees and faster transactions.

Will blockchain and cryptocurrencies be the next generation of online remittances?

Since 2009 with the arrival of Bitcoin on the internet, the concept of blockchain and its application in the financial technology sector has been changing a lot of international money transfers (remittance is one of these).

*Peer-to-peer transfers are possible with blockchain-based remittance solutions, eliminating the need for intermediaries and lowering the expenses associated with traditional remittance channels.

Cryptocurrencies like Bitcoin and Ripple are gaining popularity as a way of cross-border remittance. These digital assets provide quick and low-cost transactions, making them appealing to people and enterprises looking for more efficient cross-border payment options. Furthermore, the decentralized nature of cryptocurrencies offers greater security and anonymity than traditional remittance methods.*

*Sourced by Finance Magnates

The advantage of peer-to-peer transactions using blockchain technology and cryptocurrencies

With peer-to-peer transactions, cryptocurrencies like Bitcoin and Ripple can help both senders and recipients to cut down their fees for the intermediaries and lower the expenses associated with traditional remittance channels.

This type of transaction can help both sides to save time in waiting for the process of remittances that has usually taken from 2 to 7 working days (excluding Saturdays, Sundays and holidays). With blockchain technology and cryptocurrencies, this process can be taken in just a few minutes or faster because of its enabling near-instantaneous transfers across borders.

Furthermore, blockchain technology and cryptocurrencies can help the underbanked and unbanked populations to access financial services that they couldn’t or didn’t want. With this solution, senders and receivers just need a mobile phone or desktop/laptop to connect to the internet for performing simple operations of the online remittance process.

The role of stablecoin in the cross-border remittance process

Stablecoin is a type of cryptocurrency that is created like a fiat currency but with blockchain technology. That means this asset has the advantages of both sides: stability and low volatility of fiat along with decentralized trading of crypto.

Furthermore, stablecoins offer an additional layer of convenience by allowing recipients to receive funds directly in their local currency. This eliminates the need for the recipient to convert the received crypto into fiat currency, simplifying the process and reducing associated costs.

Regulatory for the new types of remittance: hinder or promote the development of the use of cryptocurrency

For new technology, it is inevitable that some countries are wary of its ability to cause a loss of control. In fact, there are still criminals who take advantage of this loophole in the crypto market to commit illegal acts and harm the market.

Typically, only in the last 2022, the fact that the criminal Do Kwon created a ghost project called Lunar to manipulate the market and then fled, causing international police to hunt for months.

This manipulation has caused the investors in Luna market to suffer huge losses. It is estimated that Do Kwon pocketed over 80 million USD before receiving this allegation sentence.

Because of this, regulatory changes are reshaping the cross-border remittance market, with the goal of striking a balance between encouraging innovation and guaranteeing compliance with anti-money laundering (AML) and know-your-customer (KYC) rules. Many nations are enacting or considering regulatory frameworks tailored exclusively to digital remittance providers and cryptocurrency-based solutions.

 

Regulators are increasingly recognizing the necessity of encouraging innovation in cross-border remittances while protecting the financial system's integrity. This awareness has resulted in initiatives like regulatory sandboxes, which provide a regulated environment for fintech firms to test and develop innovative remittance solutions in conjunction with regulators. These sandboxes enable a collaborative approach, allowing regulators to evaluate and mitigate any hazards while fintech firms can enhance their solutions.

Collaboration between traditional banks and fintech companies can help the transaction run smoothly

From time immemorial, international money transfer through banks has always been the only option for people who want to transfer remittances to their home country.

International money transfer through banks is almost always the only option for those who want to transfer remittances to their homeland, a habit that has been hard to break for many years.

However, this money transfer always has an inherent problem which is the cost and time that the recipient must wait for the money to arrive.

Nowadays, this problem can be solved by the cooperation between banks and fintech companies. Traditional banks, for example, are collaborating with fintech firms to integrate digital remittance capabilities into their current infrastructure, allowing consumers to send and receive payments abroad with ease. Similarly, payment service providers are working with blockchain startups to capitalize on the benefits of distributed ledger technology in cross-border remittance.

Remittance can help the poverty to improve their life and fintech can solve this more quickly.

This topic has been mentioned a lot by FinFan in previous articles on our site. Remittance can not only help the economy of a developing nation to develop but also affect other developed countries.

*In the Future: Trends and Considerations

The future of cross-border remittances is one of continual upheaval and innovation. Emerging technologies like as distributed ledger technology, artificial intelligence, and biometrics are projected to significantly improve the speed, security, and convenience of cross-border transactions.

However, as the cross-border remittance landscape evolves, various factors must be considered. These include dealing with regulatory issues, maintaining consumer protection, and encouraging interoperability among various payment methods and platforms. Collaboration among industry stakeholders, governments, and regulators will be critical in overcoming these obstacles and realizing the full potential of cross-border remittance.

Finally, recent advancements in cross-border remittance are changing the way individuals and corporations send money globally. Digital remittance platforms, blockchain-based solutions, and legislative advances are propelling innovation, lowering costs, and increasing financial inclusion. Partnerships, collaboration, and regulatory backing will be critical as the industry evolves to realize the full potential of cross-border remittance and create a more equitable and linked global financial system.*

*Sourced by Finance Magnates

 

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