There is a growing threat to the traditional banking sector with its rigid systems in depositing, borrowing and transfer of cash from one person to the other. Fintech start-ups are booming globally with disruptive solutions to the financial sector, and they are making everyone’s life much easier and efficient. One of the leading major disruptions happening within the financial sector is focused on online money transfer.
Money transfer happens every day where trillions of dollars move from one country to the other around the world. At the higher level, businesses with international operations transfer money to their subsidiaries globally to facilitate their operations. On the other hand, other businesses involved in import transactions transfer money oversees to pay for the goods they are importing.
Coming down to the individual level, you can buy commodities and services from other countries and in the event you do, you will have to transfer money to the sellers irrespective of where they are based for you to receive the products you ordered. With access to the internet, most of us are nowadays shifting to online shopping where we buy goods online and have them delivered to our homes. To ensure the online shopping transaction is complete, you the buyer has to transfer cash to the seller using a method of your choice or any other agreed upon method. In most cases, for online shopping the preferred method of payment will always be online money transfer.
You can choose to use a number of different money transfer methods that best suits your situation at any given time. The decision as to which money transfer method you choose to use can be based on different factors. One the factor to consider is the geographical distance between you the sender and the receiver on the other end. If you are in a country like Kenya and you want to send small amounts of money to a person within the country, then you can simply use the mobile money transfer platform such as Mpesa. On the other hand, if you are in Europe and you want to transfer a large amount of money to the US, then you will need to use a different platform that allows international money transfer. Among your choices is MoneyGram, Western Union, Transferwise, PayPal and other companies within the same category. You could also choose to send the money through a wire transfer from your bank to the bank of the receiving person in a different country.
Each of the above online money transfer methods have their own shortcomings that inhibit their effectiveness from a client perspective. First, all of them are very expensive means of sending money from one country to the other. With transaction fees ranging between 5% to about 12% of the total value of the money being sent, the methods listed above are both very exploitative and unsustainable for individuals who seek to send smaller amounts of money. The other shortcoming with the methods above especially western union and money gram is the time it takes before the recipient gets the money. As the sender you have to go look for a Western Union or MoneyGram agent to send your money. On the other hand the person who is receiving the money has to go the Western Union or MoneyGram agent in their country to access the money you send to them.
However, these challenges are not bound to stay for long in the financial sector globally if the current trends are anything to go by. Never before has transferring money from one part of the world to the other been made very easy and instant like today through the adoption of technology. Companies like BitGold are revolutionizing global online money transfer by use of their secure online systems to effect instant money transfer. Sending money from your comfort zone, be it in the office, on the road in a traffic jam or at home relaxing is the dream for all of us. To ensure you can send money globally with ease, BitGold allows you to transfer cash into your BitGold account from your bank account, credit card or even your debit card. Once the money gets to your account you buy gold with a minimal fee of 1% of the transaction value. You are then allowed to send the gold to any person anywhere in the world instantly as long as they also have a BitGold account. The requirements are very simple; you can use their phone numbers like in Mpesa or their email address like in PayPal. The recipient is then charged 1% transaction fee and they can then use the money in their account at that very same instant you send it to them.
Such efficient money transfer systems are coming up at a high rate. Mobile money is a common thing in many African countries with Mpesa being a globally recognized money transfer platform. The challenge with most of the new innovations is that they are localized and restricted in specific regions. This then creates more room for more innovations like BitGold and Bitcoins that go beyond boarders and still offer instant money transfer. With growing technology, we can only expect global online money transfer to be faster and the costs to be minimal. Thinking of a time when money transfer will be free is also agreeable and the time is now!