Role of Fintech in the remittance industry (2023)

The modern world is known for its seamless and borderless scope for almost every type of industry involved. As the sources and sinks of entities are outgrown nowadays, it is almost impossible for any being to keep hold of something by force. Similar is the case with the flow of money. The modern digital world has provided a lot of chances and opportunities for the physical world to keep the supply of funds easy and almost available around the clock. If you are looking for the best trading source, try this App and enjoy a seamless trading experience. You have great choices of digital currencies to trade and invest in.

This is resulting in increased connections in the world and is acting as a catalyst for the overall growth of the economy and payments related to remittances. It is a general fact that remittances flow from a developed country to a developing one and as a result, there are a lot of crowds who depend on this supply chain including funds and money. In this article, we are going to discuss the role of Fintech in this modern remittance industry.

Remittances as an industry

The concept of remittances seems to be simple and quite young in its introduction. But this is not true. Remittances are proving their ground and are helping the young age to grow stronger and wealthier by injecting funds and economies into the chain. According to studies done by many economists, it was observed that remittances have contributed more than any developed economy has ever done in the form of foreign aid. On a similar pattern, the World Bank in the year 2018 revealed that the flow of remittances to low and other middle-income countries has reached almost $530 billion. This is all due to exciting inventions and the seamless flow of money between source and sink. The process is fair and easy with the only difference being that the fees incurred are a bit high.

Fee involved in remittances

Various studies show that the fees involved in the processes involving remittances are a bit on the higher side. The World Bank in the year 2021 reported an average cost of around 7% deduction while the process involves money being sent and thus reducing the purchasing power of the recipient. Though, the percentage seems to be a bit low it is quite significant from the point of view of a low-income group of laborers or other people. Thus, this is the low-income group of workers that are being targeted while the remittances happen.

Advantages of the remittance industry

Besides the above disadvantages, the remittance industry is advancing and has a lot of advantages too. Due to the emergence of an alternative method of payment in the form of cryptocurrencies, remittances have become more significant. The role of crypto in the remittance industry can be estimated from its fast and reliable posting of transactions and cross-border trading facilities. As the crypto network knows no boundaries, cryptocurrencies can prove beneficial for remittances. The remittances platform, with the help of blockchain, can be used for the transfer of ownership and tokenization of various assets.

Security associated

Securing data and transactions involving monetary terms is one of the most essential features of a digital platform. The security associated with the remittance’s platform can be estimated from the fact that the platform praises the use of blockchain. There is no doubt about the security associated with the blockchain and as a result, the role of security gets a boost from a similar platform.

The verdict

Following these rules, one can easily sum up the role of remittances in the life cycle of economies. These facilities can help banks to leave their rooms and get the banking facilities available to the non-bankers too, thus adding to the economies of a particular country.