When was the last time you bought something with physical cash or wrote out a cheque? In fact, how often do you even have to do money transfers on your laptop rather than your phone? When did you last have a one-on-one appointment with your insurance broker? Pick any area of finance and you’ll likely find similarly big changes over the past couple of decades. 

The technology driving those changes is broadly referred to as fintech (a portmanteau of financial technology). While the term is older than most people imagine, dating as far back as 1967, it only really hit public consciousness in the 2010s. That’s not an accident, either. It was around that time that fintech startups started coming into their own and directly taking on banks and other traditional finance providers.

Since then, many fintechs have gone from upstarts to household names and indispensable tools. Internationally, apps like Revolut, Monzo, and CashApp have changed the payments and transaction space, while the likes of Robinhood and Acorn have transformed savings and investments.

Locally, Yoco and Snapscan have led the way in empowering tens of thousands of small businesses, while Naked and Pineapple have breathed fresh life into the insurance industry. But what is fintech’s next big frontier?

Outpacing traditional banks

What fintechs have done in other sectors shows what’s possible in the international money transfer space. While considerable progress has been made in sending small remittance amounts across international borders, there is still significant room for improvement when it comes to the experiences of businesses and individuals moving large sums of money internationally via traditional avenues.

Most people and businesses tend to use their banks to make international payments. He cautions, however, that several pitfalls come with doing so.

Unless you’re a large corporate or enterprise-scale business, chances are your bank doesn’t care much about your international money transfer needs. In part, that’s why so many of the processes involved with these transactions are manual or outdated.

The banks feel like they have a captive audience, and so they aren’t in any rush to evolve their offerings. It may also explain why they don’t put a lot of effort into customer experience on these kinds of transactions. This sense of a captive customer base, along with a general lack of customer education, also explains why banks aren’t transparent with the fees they charge on international transactions.

As a result of that lack of pricing transparency, customers can end up paying far more on each transaction than they should. For their part, the banks are more than happy to take the additional profit.

Fintechs competitive edge

We realised that with a simple combination of transparent fees, automated processes, and excellent customer experience, we would significantly beat the banks’ offerings. Of course, we knew we couldn’t just build a product and hope customers would come. That’s why we’ve also always emphasised customer education. People and businesses need to know that they’re not getting the best possible deal from their bank and that there are other options available to them.

South Africa is home to some of the most incredible finance and technical knowledge in the world. The people with that knowledge increasingly have global experience too, allowing them to compete with highly sophisticated international offerings. Small wonder then that several local fintechs have won international awards.

The more competitive the space is, the better we’ll all be forced to innovate further. And while banks may have enormous resources at their disposal should they choose to turn around their international money transfer products, they don’t have anything like the agility those of us in the fintech space have. As such, we’re well positioned to stay one step ahead of them.

The future of fintech international money transfers

Ultimately, the goal is for people to be able to transfer money internationally as quickly and easily as they can now make investments and pay for goods and services.

The international money transfer space is on the cusp of major transformation. And as has been the case with so many other areas in the financial services sector, fintechs will be at the forefront of that transition.

Harry Scherzer | CEO | Future Forex | mail me |

Related FAQs: Fintech international money transfers

Q: How do fintech companies improve the way to send money internationally?

A: Fintech companies enhance the way to send money internationally by providing seamless, real-time money transfer services that often feature lower fees and better exchange rates compared to traditional banks.

Q: What are the benefits of using fintech solutions for cross-border payment?

A: The benefits of using fintech solutions for cross-border payment include faster transaction times, lower costs, improved user experience and enhanced security through technologies like blockchain.

Q: How can I send money abroad using fintech platforms?

A: You can send money abroad using fintech platforms by creating an account, choosing your preferred transfer method, entering the recipient’s details and confirming the transaction. These platforms often offer various payment methods for convenience.

Q: What is the role of blockchain technology in international transfers?

A: Blockchain technology plays a crucial role in international transfers by providing a secure and transparent ledger for transactions, reducing the need for intermediaries and enabling faster and cheaper cross-border money transfer services.

Q: Are fintech companies leading the charge in cross-border money transfer?

A: Yes, fintech companies are leading the charge in cross-border money transfer by innovating payment solutions that make sending money across borders faster, cheaper and more accessible than traditional banks.

Q: What payment methods do fintech companies offer for sending money internationally?

A: Fintech companies offer a variety of payment methods for sending money internationally, including bank transfers, credit and debit card payments, mobile wallets and even cryptocurrency options, allowing users to choose the most convenient option.

Q: How do fees for fintech international money transfers compare to banks?

A: Fees for fintech money transfer services are generally lower than those charged by banks, making them a more cost-effective choice for sending money internationally. Many fintech platforms also offer transparent fee structures and competitive exchange rates.

Q: What are remittance services and how do fintech companies enhance them?

A: Remittance services facilitate the transfer of money from one country to another, often used by migrant workers. Fintech companies enhance remittance services by offering seamless, low-cost and real-time transfer methods that improve the overall payment experience.

Q: Can I send and receive money using fintech apps?

A: Yes, many fintech apps allow users to both send and receive money internationally, making it easy to manage financial transactions from anywhere in the world with just a few taps on your smartphone.

Q: How are fintech innovations changing the landscape of cross-border transactions?

A: Fintech innovations are changing the landscape of cross-border transactions by introducing faster and more efficient payment systems, reducing transaction costs, and enhancing security and accessibility, thereby revolutionising the way people send money internationally.