With the advance of technology, the market has seen the advent of interesting and beneficial partnerships both for the parties and the entire sector.
This is the case of the partnership between fintech and remittance. The alignment of business is well regarded by investors, those responsible for the company, and, especially consumers.
In this article, we will discuss some interesting points so that you can learn more about this partnership and understand how it impacts the market. Enjoy it.
What is a fintech?
Fintech can be defined as a technological company focused on providing solutions for the financial market.
This term may sound vague, but I'm sure you've come across one of these companies. Have you ever heard of a digital credit card, with no annual fees, operated through an application? This is a clear example of a fintech existing in Brazil.
Fintech companies can operate financial services on it’s own or can partner with traditional Banks to provide it’s services.
But fintech isn’t just about credit card companies. Some other businesses are in the fields of fintech:
- National and international payment;
- personal financial control.
A company that is pioneering in any financial area and has the core of its business as technology, featuring characteristics of a startup, such as scalability and less bureaucracy, can be considered a fintech.
What is a remittance company?
Remittance companies are businesses focused on remittances as their main activity.
These entities operate on a global scale and can send remittances to any country in which they operate, normally partnering with local banks and processors to pay final beneficiaries.
Several companies in this field have partnerships with bureau de change, which is very advantageous and convenient for the customers of the system.
The Partnership between fintech e remittance
The partnership between the two companies occurs almost naturally.
The alignment of these two services results from the need for an agile and secure service for the transfer of funds by those who are abroad and have families depending on that transfer that normally they will consider as part of their income.
This partnership found the strength to be more solid, given the current model of transfer of funds from other countries by conventional banks. Remittance companies might face bureaucracy and lack of transparency on fees and timeframes. Risk of unknown taxation until the money reaches its destination, because of the money route might use several intermediates and standardized service.
With the advent of that partnership, between remittance companies and fintech companies, it becomes much simpler.
With fintechs partnering with FX Banks and offering such service locally, it’s a win-win relationship not between companies, but for senders and final beneficiaries too.
The fintechs will offer:
- an alternative for customers from the remittance companies to choose how to receive the funds from abroad.
- Remittance companies will have a clearer view of the money route and no hidden fees or costs
- The technological companies can offer account validation to make sure the beneficiary will receive the funds
- Speed on the financial flow so the beneficiaries can receive the money when they need the most.
The partnership between fintech and remittance aims to shorten this path and offering much more interesting rates and especially better service.
With these partnerships and with fintech leading this process, remittance companies have access to different channels, compared to traditional banks, offering better rates and solutions to the customer.
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