Challenges still exist with cross-border remittances
Challenges with cross-border remittances
With remittances expected to increase by 3.7% to $802 billion in 2022, remittance fees could also see an unfortunate increase. Convenience and transparency are also factors that remain as a barrier to remittances. However, through digital payment methods like Paysend, people have more transparency, visibility, and power over when and how they want to send money to family and loved ones across borders.
Inaccessible for those who need it most
Remittances are especially beneficial in less developed countries where economic inequalities and financial illiteracy have left local populations less-financially secure. Regions that have large unbanked populations, such as LatAm and Africa, have been hit especially hard with an inability to access traditional financial systems, but the times are changing. For example, for decades the U.S. has imposed a $1K family remittance cap per quarter on those living in Cuba. Today, the U.S. government has finally lifted this cap, giving Cubans more access to remittances and money transfer capabilities.
With digital money transfer services like Paysend, it does not matter if you are banked or unbanked, all you need is a cellphone and digital wallet to accept incoming funds.
Sky high remittance costs due to fees
With the onset and continuation of COVID-19, digital remittance companies have touted left and right that they have the lowest fees in the market. However, customers are still subject to spending more money on transfers due to hidden fees. Historically, there has been a lack of cost transparency within the industry when it comes to overall costs. Remittances can run into price hikes via exchange rates, transfer fees, receival fees and more. This is precisely why the United Nations has set a worldwide mobility goal to make digital money transfer fees less than 3% by 2030. We are proud to already have pushed towards this mobility goal offering customers a flat $2 transfer fee.
Paysend’s remittance and cross-border payment solutions
Paysend has built multiple partnerships with financial institutions across the globe, aiming to bring citizens the opportunity of financial equity and inclusion. Through a partnership with Visa Direct, Paysend’s U.S. customers can send funds directly to eligible Visa cards in 107 countries, while UK customers can send funds to 114 countries. In addition, a partnership with Mastercard now allows U.S. customers to send funds and remittances directly to eligible Mastercard cards in Latin American countries such as Mexico, Guatemala, Dominican Republic, Honduras, and El Salvador. Lastly, through a partnership with MOVii, customers can send real-time transfers to mobile wallets of banked and unbanked populations in Colombia.