The Actual Cost of Digital Remittance and What It Means for Money Transfer to India
The World Bank saw a surge in digital remittance technology during the pandemic. Therefore, many people expected that since communities were made vulnerable by Covid-19, we would see a considerable drop in money transfer to India and abroad.
What this means is more and more people are becoming aware of how digital remittance technology can be beneficial for money transfer to India.
In this article, we’ll be exploring the reasons why.
Digital Remittance vs Traditional Banking
What is a digital remittance?
Put simply, digital remittance means sending money online via the internet using a money transfer website or an app. With traditional banking one needs to have a bank account and the transfer of money is done from one bank account to another.
The problems with traditional banking
There can be several charges associated with sending money online with traditional banking. For example, when you send money from the UK to India, your currency must be converted to the local exchange rate. This is the value of one country's capital against another.
Banks use an interbank rate rather than converting money directly against the exchange rate. An interbank rate means one bank will loan another bank money in the currency it needs to lower its exchange cost. While this may benefit the bank, it doesn’t necessarily benefit customers. Because the banks are all lending to each other, they can save money on their own exchange rate while charging a higher premium to customers.
The benefit of digital remittance
However, a digital remittance exchange rate will be closer to the currency's actual value. This is because digital remittance services have the same access to wholesale currency rates.
Whilst the money is moved digitally in digital remittance, your recipients don’t necessarily need to have a bank account. TangoPay also has an option for its users to visit one of their collection points in India to receive their money through a cash pickup. This means you lose none of the flexibility whilst accessing better rates with TangoPay.
As we have discussed, there are financial benefits for choosing online banking over traditional banking. For example, suppose you need a money transfer to India quickly. In that case, digital remittance is blazing the way in terms of speed and affordability.
Find out today how TangoPay can make sending money abroad a breeze!