How Technology Has Changed the Way We Send Money Overseas

Last updated on January 27, 2019

Technology has changed the way we live our lives in different ways, one of which is how we carry out cross-border fund transfers. History suggests that the global remittance industry dates back to the ninth century, when Chinese traders made use of paper vouchers, or flying money, as a safeguard against thievery. Ways to sending money from one country to another have evolved considerably since then.

The Progression

Sending money across borders saw a significant change toward the late 19^th century. Wire transfers gave people an easy way to send money from one place to another and several non-banking entities began offering this service. Western Union, one of the early players in this field, continues to operate even now.

Wire transfers were commonly used till the early part of the 20^th century, but the reliance on mail as a mode of communication did not do much for processing times. Once international money orders entered the picture, it did not take long for this medium to take over as the preferred mode of sending money across borders. Low costs aided their popularity, although turnaround times depended on different factors. 

Electronic transfers saw light of day toward the end of the 20^th century. Now, these transfers account for more than 90% of all international remittances. Depending on what you’re after, you may transfer funds directly to someone’s bank account or get the recipient to collect cash from a cash pickup centre.

Specialist Online Fund Transfer Companies

Banks have lost out of their share of the overseas funds transfer pie in the last couple of decades, mainly because of higher costs and slower turnaround times when compared to specialist money transfer companies. Western Union has evolved considerably since it launched its wire transfer service in 1872, and it now has storefronts in many countries. Other popular companies with storefronts or agent locations include Ria, Azimo, WorldRemit and MoneyGram.

If you need to transfer funds to someone’s bank account, you get way more options from which to choose. Some of the best include World First, TransferWise, CurrencyFair and OFX. It’s a good idea to compare money transfer companies before transferring funds because factors such as where you live and how much money you wish to send may affect your decision.

The Future

The use of second generation mobile phones in different parts of the world presents an opportunity for businesses that deal in overseas fund transfers as well as mobile phone network providers. Digicel, a network provider present in more than 30 markets across the Caribbean, Oceania and Central America, is already showing interest in micro insurance and mobile banking. Denis O’Brien, its Irish billionaire owner, has suggested that he plans to turn to facilitating cash transfers in the future.

The increasing acceptance of virtual crypto-currency may just change the way we send money across borders. Platforms such as Bitcoin, Litecoin and Ethereum are gaining credence in most parts of the world. Going forward, these mediums might give you a more cost-effective and easier way to move funds overseas.

Conclusion

Whether you need to transfer funds for personal or business reasons, you’ll be hard-pressed in finding a bank that can live up to your expectations. Technology has moved the pendulum in favour of specialist fund transfer companies now, and it looks like more changes might disrupt the market in the not-so-distant future.