Although IMTOs provide more affordable money transfer services to the customer, there is another side of the story. Central Bank of Nigeria (CBN) terminated the license of multiple IMTOs. Their biggest concern on papers was the illegitimate transfer of economy. At the same time, banks received tough competition from the International Money Transfer Operators.
But even today, in Africa’s biggest remittance receiving nation – Nigeria – banks are charging a very high transaction fee. Furthermore, banks take anywhere from 2 days to a week, and sometimes, even more. This is why Nigerian migrants are turning towards platforms like FAZRemit that facilitate online money transfer services to Nigeria.
In this blog, we will discuss how such online platforms are overshadowing the reign of IMTOs. We will enlist all the claims made by IMTO’s. While we do so, we will be critically arguing with their points.
Let’s Debunk Some of IMTOs’s Arguments
1. Deregulating IMTOs will give way to a completely unregulated economy
IMTOs have been accepting cash payment for a long time. This threatens security and has the potential of violating AML/CFT. Now that KYC is mandatory, it affects the instant registration service of the IMTOs. However, under the umbrella of IMTOs, financial transactions are unable to be tracked. Even if it is not true, this is used by financial regulators to undermine the advantages of IMTOs and question their business.
On the other hand, online money transfer services partner up with the banks. The unregulated economy, as claimed by the IMTOs, is a major concern for the Nigerian economy. But this is the reason why FAZRemit strongly recommends customers to avoid international cash transactions.
2. IMTOs have the best technical infrastructure
Yet IMTOs are charging a considerably high transaction fee. When compared to banks, apparently, it is very low. However, when it comes to online money transfer services, this fee is cut down by a considerable margin.
Simply put, IMTOs take a longer time to complete KYC verification. Moreover, time and again, their system has proven inefficient to ensure that all their registered users are legitimate. This ends up in the organization committing mistakes and allowing fraudsters, money-launderers and terrorism-funding parties to do the transaction. Even if an IMTO’s intentions are right, they are paying more heed to convenience than security.
3. An international wire transfer cannot be cheap for users
Yes, overcoming this problem is what a unique service – online money transfer – does! Unlike all the banks, IMTOs and even other international money transfer service providers, FAZRemit’s processing fee never exceeds 2% of the total transaction amount. This is why FAZRemit claims to provide the cheapest money transfer to Nigeria from USA.
Why Are We Far From All-around Digital Remittance?
The world is moving towards digitization and at an explosive pace. Yet, around 100 million Nigerian adults are unbanked. The worse part is – this number is increasing at an alarming rate. There are multiple advantages of digital transactions but some limitations as well. And undoubtedly, now with poverty and more stringent international KYC laws, scalability will be a huge problem.
There is a lot of competition in the market. And this competition gets even fierce when financial transactions are involved. But with the emergence of revolutionary ideas and implementation, there is one party that always wins – You, the customer! But the question is – How many?
To put it in the most relatable words, we are uncertain of who will be sitting on the throne of international remittance. But among the characters that we know today, online money transfer services surely is the favourite. To experience fastest online money transfer to Nigeria from the USA, register on FAZRemit today!