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The Rise Of Digital Remittance Services: Convenience Vs Security

The Rise Of Digital Remittance Services: Convenience Vs Security

30 Jan 2025


Do you know what the two biggest challenges were in traditional ways expatriates would choose to send money home from abroad in past?

 

Yes, you guessed it right!

 

Lack of convenience and risks involved in the process were the two biggest challenges expatriates faced in the days of yore. However, the need to expatriate and move money across borders existed for a long time. This pressing need and the complexities in the process ran parallel until pretty recently, leading to the rise of digitization of the process.

 

Fast forward to nowadays, and remittance transfer has become a practice rooted in technology that offers both convenience and security. But technological advancement has covered several other areas, too, which will be discussed in this blog.
 

Why Do Convenience And Security Hold Prime Importance In Remittance Transfers?

Well, simply because sensitivity is innate to financial matters, you leave your family and support network and get out of your comfort zone to reside in another country to earn a living.
 

The money you earn after undergoing such hazards, at the least, requires it to be safe when being processed. Processing remittances largely means sending your money back home now and then to serve the purpose for which you expatriated in the first place – to support your family financially.
 

It is neither possible nor admissible that you travel back to your native country now and then to deliver money. Right? So, the easy way out is to send money online with security and convenience.
 

Remittance Transfers In The Early Stages

Needless to say, banks monopolised the cross-border movement of money until recently, with large swathes of global migrants still resorting to banks. It is despite that transacting money through banks is largely inconvenient due to the following few reasons, notwithstanding optimal financial security.

The inconveniences in transacting money through banks came to light only with the advent of online money transfer companies, many of which provide both convenience and security with several other features.
 

These inconveniences are:

 

  • As the banks monopolised traditional money transfers in the early stages, both the sender and recipient needed to have bank accounts, without which the transfer was impossible. The fact that a majority of the people in low- to middle-income countries (LMICs) are unbanked only aggravates the issue.
  • In traditional ways of transferring money through banks, the time the transactions take is another major issue. It takes between 3 to 5 business days to complete a transaction with banks. This time can extend, too, depending on the volume of money, destination country, etc.
  • Given that the banks operate in limited hours, normally from 9 to 5, it makes access to banks limited both for the sender and the recipient.
  • The fee banks charge high in normal circumstances, and it can increase too depending on the amount, where the transaction originates, and where it is directed.
  • Currency exchange rates are another big challenge in transactions through banks. These exchange rates are static and uncompetitive, impacting almost every global money transfer made by expats.

These are some of the basic challenges you still face in your money transfer through banks. Although banks have been trying to overcome these challenges, they still have a long way to go yet online money transfer companies, on the other hand, have already taken the lead in this regard.
 

Remember that despite these challenges, a large number of people use banks for remittance transfers due to the security of funds.
 

Now, let’s take a look at some of the statistics about global remittances and the number of global migrants.
 

Fast Facts About International Migrants And Global Remittances

 

  • A report by the International Organization for Migration (IOM) says that the total number of international migrants is 281 million, accounting for about 3.5% of the total global population.
  • In 2023, global remittance flows were estimated to be around $883 billion. Projections indicate that this figure will rise to $913 billion by 2025. The remittance sector saw significant growth during the COVID-19 pandemic, with a notable 10% year-on-year increase between 2020 and 2021.
  • Total Together, these migrants, the World Bank report says, moved about $656 billion in remittances in 2022. 
  • These remittances grew by 5% in 2022. This is lower than the 10.2% increase in the volume of global remittances in 2021, the same report stated.

Now let’s take a look at the benefits digital remittance services provide you, including convenience and security – either or both!
 

Digital Remittance Services – The Benefits

 

  • Firstly, the services are fast and seamless. Here you initiate a transaction, and there the recipient receives funds after a few minutes lapse. The time, however, varies substantially and depends upon which service provider you choose.
  • Secondly, the speed at which transactions are initiated and completed makes digital transfers secure, whose security is further beefed up depending on your selection of the service provider.
  • Thirdly, online money transfer apps make transfers convenient, which you can initiate either on the go or from the middle of your comfort zone.
  • Fourthly, the fee is minimal in digital remittance services and is charged as a small percentage of the amount being transacted.
  • Fifthly, currency exchange rates are competitive as they are linked with the fluctuating international market, which makes them live on the one hand and allows you to initiate a transaction at a time when rates are most favourable.
  • Sixthly, these services are accessible and available round the clock.
  • And lastly, you can track the status of your transaction in real time until it completes and the recipient gets the money.

These advantages make digital remittance services take precedence over traditional methods of international money transfer by resting concerns like convenience and security and by offering loads of other features explained above.
 

ACE Money Transfer – Changing Course Of Global Remittances

Your online money transfer is a simple process involving tight security and convenience if done via ACE Money Transfer. The other benefits the company offers you include: 24/7 service access, live exchange rates, low fees, around 350,000 pickup locations in over 100 countries, and speed so fast that getting remittances is just akin to taking money out of your wallet!
 

FAQs

What are digital remittance services?

Digital remittance services allow people to send money internationally through online platforms and mobile apps, offering a faster and more convenient alternative to traditional bank transfers.

How do digital remittance services ensure security?

Most digital remittance platforms use encryption, multi-factor authentication, fraud detection systems, and regulatory compliance measures to protect users’ transactions and personal information.

What are the advantages of using digital remittance services?

They offer convenience, speed, competitive exchange rates, lower fees, and the ability to send money anytime, anywhere, without visiting a physical location.

Are digital remittance services safer than traditional money transfers?

While digital services provide enhanced security features, they are also susceptible to cyber threats. Choosing a reputable provider with strong security protocols is crucial to ensuring safe transactions.

What are the risks associated with digital remittance services?

Potential risks include online fraud, phishing scams, data breaches, and unauthorized transactions. Users should always verify the legitimacy of a service before making a transfer.

How can I ensure my digital money transfer is secure?

Use strong passwords, enable two-factor authentication, avoid using public Wi-Fi for transactions, and only transfer funds through trusted and regulated remittance providers like ACE Money Transfer.

Do digital remittance services offer better exchange rates than banks?

Yes, many digital remittance platforms provide more competitive exchange rates and lower fees compared to traditional banks, making them a cost-effective option for sending money internationally.

How does ACE Money Transfer balance convenience and security?

ACE Money Transfer offers a user-friendly platform with fast transactions while ensuring top-tier security measures, including encryption and compliance with financial regulations, to protect customer data and funds.


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