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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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What are the different ways of money transfer to Nigeria from US?

In this era of technology, completing the basic banking deeds have become an easy task. Today one can transfer money not only from one state to another but from any part of the world to another…

In this era of technology, completing the basic banking deeds have become an easy task. Today one can transfer money not only from one state to another but from any part of the world to another. With the help of banks and money transferring platforms, it has become very easy to transfer money and to complement these transfers, a complementary currency conversion (or in some cases, as additional charges) with the basic transaction is also available. In this article, we’ll discuss the ways to money transfer to Nigeria from US.

Types of International Money Transfer Services

International money transfer is a broad topic and it is divided into various segments. Generally, international transfers are made either for personal use or for professional and/or business use. Basically, if someone wants to send money to Nigeria online, it is best to use interbank transfers, through wired transfer, private money transferring platforms or through bidding sites. Let’s take an overview of these options –

Bank Transfer

Generally, every bank has its own rules and regulations to transfer the money. Since, in the general population, there is a fear of fraudulent activities by private organizations, therefore, for big transactions, especially for FIAT currency exchange, banks are considered the most reliable option by the most.

However, because of the strict and in fact necessary policies by the government, such institutions can be tracked down and are accountable for any illicit activity on their platform. This has empowered the individuals and businesses who have the options to choose from the three most common ways to send money, namely, ACH which is the cheapest, wire transfer – the fastest and bank transfers that are considered as compared to be secure. Next on the list are

Private Platforms

Platforms like PayPal, Swift wire charge a fixed percentage or cut and transfer money from one country to another. These platforms operate on their own and provide comprehensive security throughout the entire process. These platforms are used for any country, for instance, if one seeks out for money transfer to Nigeria from US or wants to make a transaction from any part of the world to another, he or she can do easily it through online payment systems. FAZRemit, being one of those sites not just provides the fastest platform to wire money to Ghana, Nigeria or Kenya from US, but also ensures that the transaction cost is the lowest, and that only verified entities, be it individuals or businesses, are involved, thereby making the process highly reliable and secure from the point of view of both, the customers as well as legal entities.

Bidding Sites

This option is not so popular among the international money sending customers but it can surely help in achieving the task. All that one needs to do is create a task and all the money transfer operators bid on it. Although it provides a competitive rate for the customer, at the same time, this is a rarely used option because of the additional cost involved due to the involvement of a middle-man.

What is IMTO?

In the overall International money transfer market, which is currently worth more than a trillion dollars, there are a few fraudulent money transfer platforms that are luring in individuals with schemes that are too good to be true.

To stop such activities, financial regulatory bodies such as Central Bank of Nigeria has licensed only a few IMTOs, and it is highly recommended that one chooses from them. Few of these registered IMTOs facilitating money transfer to Nigeria from US in the US-Nigeria corridor include:

  • Smallworld Financial Services (licensed partner of FAZRemit)
  • TRANS-Fast Remittance,
  • WorldRemit limited,
  • UAE Exchange Centre LLC,
  • Wari limited, and
  • Home Send S.C.R.L.

Nigerian Banks v/s IMTO

Generally, it is recommended that one must choose banks over IMTOs but there are multiple reasons why the latter is steadily gaining its speed and the global market is undergoing the paradigm shift. First is the scale at which they can operate. Unlike banks, IMTOs are constantly upgrading their services based on the customer feedback while on the other hand, there are no groundbreaking upgrades in the banks’ functioning which, in the long run, could prove fatal for the banks. Secondly, the significantly low processing time plus the overall charges levied by IMTOs has always been much ridiculously low as compared to banks.

In Nigeria, this list also includes one more problem, i.e. distrust among the common people for the banks and especially government agencies which although have gone through challenges over the years but have not delivered on their promises of providing the most basic amenities to the common people. This perception is also shared by the immigrants and remittance senders.

How to find the best money transfer to Nigeria from US?

Money is an essential and hard-earned commodity, and it is one’s obligation if not the only option to check all the criteria before opting for any money transfer providing services. To put it in a simple manner, there are just 4 criteria to find the best money transfer options –

It is easy to go on any platform and get a persuasive webpage that would try to attract a user. Basically, this is the purpose and the sole objective of creating any website, moreover, any online content but it in the end, what matters the most for a user is to find ‘value’ that can only be achieved through a balanced and analytical approach to make the final decision.

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