It cannot be emphasized enough the importance that remittances have on their recipient, economically and socially. The economic infusion is a necessary cash injection for its beneficiaries. Remittances are a source of often a basic survival, existence for them.
Historically, remittances have proven to be a reliable, integral link between traditional financial institutions and the unbanked and/or underbanked recipients. This is because the conventional bricks-and-mortar of banking has either outrightly ignored or unwilling to fiscally engage with this societal majority, particularly in developing nations. This practice has condemned remittance recipients to systemic poverty that has a vulnerable indebtedness to their historical financial options on indentured labor, loan sharks, pawnshops, and payday loans.
Instead, remittance payments give a practical leg-up towards financial acceptance and inclusion. Remittances allow the unbanked underbanked to contribute to their communities and countries’ economic survival and growth. This financial freedom is achieved through the opening of functioning bank accounts for the remittance recipients.
Assisting the remittance process are digital wallet applications. Digital wallets provide the method and integrations to send remittances instantaneously from the sending wallet to the receiving wallet. Integrated to the largest remittance rails in the world (TransferWise, RIA, WorldRemit, Skrill, Coinbase, and others), the digital wallet enables the transfer of both fiat currency and crypto-currency internationally.
Digital wallets are often faster, cheaper, and more convenient. Digital wallets do not have the same level of compliance as a bank account and are therefore suitable for migrant works, unbanked, and those in search of convenience. When paired with a companion Visa or MasterCard merchants, ATM’s and online stores globally can accept the digital wallet anywhere Visa and MasterCard are accepted globally.
Digital wallets are typically integrated with a consumer’s existing bank account through APIs from organizations such as Plaid, Stripe, Central Bank National Payment Gateways, and Open Banking APIs, enabling users to transfer funds seamlessly into and out of their wallets.
The importance of maintaining remittances throughout this new world order, hindered and influenced by the pandemic’s ravages, relies on the easy flow and transfer of funds through the efficient and effective utilization of these apps or similar incantations. The transfer of funds is typically in real-time, and the exchange rate is calculated at the spot rate at the time of transfer. Digital wallets often provide:
- Competitive exchange rates and lower fees.
- Enabling lower-income to access financial services.
- Unbanked and migrant workers can send their hard-earned money to their dependents without being fleeced.
As the world enters another phase of lockdowns and physical restrictions, the remittance industry can be assured that implementing applications such as the digital wallet will ensure the continuation of readily available cash to the beneficiaries. Simple yet effective.