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Tag: online money transfer services

Online Money Transfer Services – Are They Better than MTOs?

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…

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.

Read – FAZRemit’s Lowest Transaction Fee for Money Transfer Nigeria. But How Much?

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.

ReadFAZRemit’s Wire Transfer Fee – Rate List.

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!

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Online Remittances Are The Biggest Source of Nigerian Families’ Development

Nigeria, being the biggest remittance centre in the entire African sub-continent received more than $25 billion as remittances in 2018. Yet, 87 million Nigerians are living in extreme poverty which…

Nigeria, being the biggest remittance centre in the entire African sub-continent received more than $25 billion as remittances in 2018. Yet, 87 million Nigerians are living in extreme poverty which is the largest in the number.

Non-recipients of remittances have shown a negligible change from the state of poverty as compared to the families receiving remittances. Further, the recipients use this money to spend on basic household expenses.

Remittances uplift the overall standard of life. In that line, the recipients spend the financial aid on crucial social amenities including education, health, and better housing. Remittances allow Nigerian families to improve their creditworthiness and strengthen them to take part in the formal economy. Collectively, the overall nation benefits from this increased contribution.

So, what should be done?

The Nigerian government is yet to lay down specific policies to constructively use the revenue generated through remittance inflow. World Bank has also recommended the Nigerian government to strengthen its remittance policies by lowering the transaction costs. In the meantime, it is important to understand that things are not as simple as they sound. There are after-effects of every single decision. In the case of developing nations, they have to overcome the problem of brain-drain.

Complications

Even renowned global financial institutions have pointed out that the overall remittance trend is causing money-drain.

But, how?

Educated Nigerian youth that returns to his or her own country, generally, prefers imported goods instead of local products and services. At the same time, one can argue that remittances help limited Nigerian families. But those who become successful, start getting attracted towards western culture. Consequently, their preferences and spending structure changes. And, a major part of the money starts flowing towards foreign investors instead of the national economy.

money-drain-nigerian-families-fazremit

This is a concerning issue. However, in the short-term, especially in the current scenario, this influx could significantly help poor and struggling Nigerian families earn a piece of bread. To conclude that remittance alone can change the course of the downtrodden Nigerian economy would not be right. But in the end, it’s the Nigerian government that needs to take notable initiatives to strike a balance between the pros and cons of foreign aid, investment, and remittance.

Recommendations

It would be best for the Nigerian government to best let the remittance trend benefit its backward communities which are struggling the most. Lack of education is leading to unemployed people joining the rebels, especially in Southern Nigeria.

Coping up with insurgents would require more federal reserves to be allocated for security. The same security budget that exceeded $1.7 billion in 2017. If the same trend continues, it would continue to take its toll on the economy. Moreover, the Nigerian families that could be assisted sooner will keep suffering for a longer time. This would further stimulate more anger, distrust and feeling of rebellion among the common people. Hence, it is a vicious cycle that needs to be stopped as soon as possible.

unending-cycle-fazremit-nigerian-families

Although this is just one of the many reasons, it is crucial for the government to control the situation now. To achieve that, the Government of Nigeria (GON) must check the fluctuation in social spending (budgets for education and health of Nigerian families).

Lastly, A Note for the Nigerian Families

At the same time, Nigerians need to actively participate in the Nigerian economy by limiting the use of cash. To understand the extent to which this can help on a global level:

Digital and cashless services, if accepted worldwide, can save enough revenue for 30 million books for schools and 20 million school uniforms in low-income nations. This can be a boon for at least 200,000 out of 12 million (highest in the world) out-of-school Nigerian children.

Although the government has a major role in uplifting the economy of the country, Nigerian migrants can also play their role by opting for the best money transfer services as the banks are unable to provide them with the same. To achieve this, FAZRemit provides the cheapest money transfer services to Nigeria from the USA. Because of the fastest transaction speed, FAZRemit ensures that every beneficiary receives the money at the right time. This could be just the first step towards revolutionizing the way migrants send money to Nigeria but it is undoubtedly the need of the hour.

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