By Jay Dahal, co-founder of Machnet.
Remittance has not only been a cornerstone in the economy but is also a means of hope for people with family members living abroad. There is often a family back home in need, patiently waiting to receive money. On the other end of that story is the hard-working person responsible for not just themself but their family back home. Remittance ties them together in fulfilling one’s duty and the other’s need. At times, it’s been a lifeline of sorts as it carries the capital flow and has been growing through the years. In recent studies, remittance has grown to become a $700 billion industry and is projected to grow up to $930 billion by 2026!
The million-dollar question remains: “How can your business have a piece of that $930 billion pie?”
The short answer? Embed remittance as a service to your existing business model!
“Remittance” means sending money from point A to point B while crossing states or countries. And sure, your current business model may not be all about cross-border payments, but that doesn’t mean you can’t have a percentage of that multi-billion dollar industry. You can adopt and integrate this capacity into your existing ecosystem, give added value, extend another service to your user and provide support.
This might be an easy adjustment if you’re already in tech or thriving in the digital space. Here are a few things to remember as you search for an international money transfer API provider.
You’ll want to consider time.
- How soon do you need this done?
- How fast can people get this done?
- How well will that service be done?
By now, you already know how beneficial embedding remittance as a service will be for your digital business; the question is, how fast can you pivot? Are you ready to adopt a new service now? Do you need a few months before you can add a service? Determine how much time you need to properly communicate these changes to your customers and figure out how aggressive you and your team are in making this shift.
On average, finding a cross-border money transfer API and embedding remittance as a service takes about two to three months. But if you find that you’ll need this done sooner, some API providers can embed remittance as a service in as little as six weeks.
On the contrary, it can also take somewhere from two to three years to build from scratch. So if you’re thinking of DIY-ing this, you might want to save yourself the trouble and work with an off-the-shelf cross-border money transfer API provider instead.
A safe estimate would be to give yourself a six- to 12-week lead time when making this decision.
That means you have that much time to make sure your end users are aware of the additional service; you’ll have that much time to market it and that much time to make sure your customers will adopt the service as warmly as can be.
Value For Money
The next thing to consider is your cost.
- How much are you willing to shell out to embed remittance as a service?
- How many end users do you think will benefit from this based on your data?
- Which API provider can give you the most value for your money?
To give you an idea, the average cost of an international money transfer API provider ranges from $2,500 to $10,000 on SaaS fees. Most cross-border API providers offer similar services, but who can you count on the most? Consider the support you’ll likely need in the earlier days of this service and whether the provider can guide you through the new processes. Look at conversion rates and at which provider could give you the best one. How soon are payouts and service fees handled? How much will ACH and debit card funding cost? These may seem like little things, but these costs add up; therefore, they must be considered wisely.
When looking for an API provider, remember that what you’re paying is not all that it’s worth. Consider your time, your patience and troubleshooting with your customers. So while finding an API provider that you can afford is important, it’s more important to find one that aligns with your bigger goals. Think about your business’s future: What can you build that can keep growing alongside your business? Like any important decision, don’t rush into the first one you come across. While it may take more time, knowing your options can help save you more time and money in the long run.
This part comes close to market research. Every API provider offers remittance to different corners of the world. Your goal is to know where your customers need to remit. Are their relatives and friends mostly based in the U.S.? Are they in Canada? Are they in Europe? A quick Google search plus your existing data will point you in the right direction.
Once you’ve gotten clarity on that, look for an international money transfer API provider that can bridge that gap. Think of it as a specialization. If your business is based in India or Nepal, know which parts of the world your customers need to reach the most. This insight will be the best way to bridge that gap through your business. Understanding this can direct you to a platform or API provider with a more flexible reach within these regions.
Being a part of that $930 billion pie is about much more than just the revenue—it’s impacting your country and the citizens working tirelessly for their families. Right now, there are only a handful of options, which means longer turnaround times and higher service fees. But being that platform for your community can help introduce competition and provide a better service. With a reliable cross-border payment API, you can localize cross-border payments and create solutions for you and your community.