Sending money to other countries is an expensive task with never-ending chains of mediators, manual paperwork, and hidden fees. But due to technology, all this has revolutionized. It means that people and small to medium-sized companies may enjoy faster remittance services in the industry.
And if someone wants to send money to Bangladesh online or another country, things have been made very simple. But how did this technology turn and twist over time? Let us explore some of the reasons.
What are MTOs?
MTOs are Money Transfer Operators that are financial companies. But mostly banks engaged in the cross-border transfer of remittances. These financial companies use either the internal system or access to cross-border banking networks.
The fees are Lowering While MTOs Dominate:
International money transfer to Bangladesh or any other country is mainly referred to as remittances. According to the World Bank, total remittances sent during 2016 were above $530 billion and grown at the CRAG of 10.4% since 2000. It has shown a significant global services market.
The average cost of senders of remittances in 2017 was 7.21%, following declining prices. Charges are decreasing due to healthy competition and pressure from G20 and the UN.
These bodies pay special attention and their efforts to online money transfer services due to its too much popularity among low-wage employees. Looking at remittance corridors, the whole pattern shows that money is mainly sent from economically developed counties to developing or underdeveloped ones.
Western Union is facing downward pressure on fees:
Western Union is the biggest MTO by dollar volume traded. Hence, it is the prime target for disruption by the newcomers. Its main hold over the market comes mainly from the established and vast networks of brick and mortar affiliates branches.
These brought physical convenience and brand awareness with a steady introduction of value and added services that have attracted corporate customers.
When people send money to Bangladesh online or other countries, they have to make sure they go through the assigned process. There has been a primary focus on increasing the FX revenue that, in absolute terms, hasn’t grown more than eth decline in total fee charges.
TransferWise: Competing On Price But Scaling On Greater Things:
TransferWise is a privately owned company formed in Estonia in 2011. In later 2017, news about the impending funding round shed some light on its very recent performance. It is targeted to make a revenue of $100 million in 2017 and holds a 10% share of the UK money transfer market.
With the $117 million of capital already raised, its valuation is predicted to reach $1.6 billion on its next fundraising round. Its business is now breaking even. It also seems that TransferWise has already hit an infection point, and all investors have continually backed it.
What is already surprising is that the success of TransferWise appears to be making magic happen over razor-thin margins. The whole business famously does not earn any FX spread on its transactions and only charges the clients a fee.
So are you prepared to send money to Bangladesh online, knowing all the winning facts that are too amazing for the remittance transferring market?