For as long as people have traded goods across borders, some form of international payment has existed. Initially, this process involved bartering (the exchange of one good for another), then money broking, and analogue currency exchanges. By the late 19th Century, the technology for international wire transfers had evolved sufficiently for it to become widespread. Soon after, electronic funds transfers (EFTs) were introduced, and by 1973, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network came into being to make international money transfers more secure.
Each of these advances has undoubtedly made the process of moving money across borders more accessible and more convenient. However, as significant as they’ve been, there’s no escaping the fact that it typically takes several days or even weeks for the person on the other side to receive the payment.
Fortunately, a wave of technologically-led disruption is changing that for the better. It’s making payments faster, improving the user experience, and automating what have historically been drawn-out processes. In driving these advances, the disruptors behind them are helping ensure that international money transfers reach their full potential as economic enablers.
The problem with the status quo
As Harry Scherzer, CEO of international money transfer fintech Future Forex explains, this change has been a long time coming. As the nature of global business continues evolving, the status quo, where transactions take as long as they do, could become an even bigger headache than it already is.
“Most of today’s global supply chains have to operate on incredibly tight schedules to be effective,” he says. “The same is increasingly true for service-based offerings that operate internationally. Any delay or interruption owing to payment processing times can have massive consequences down the line.”
According to Scherzer, many of these delays stem from the fact that banks and other traditional players have little incentive to improve their international money transfer services.
“As things stand, banks and other traditional currency exchange providers make massive profits on transactions,” says Scherzer. “Why would they take any action that risks denting those profits?”
Change is here
As the Future Forex CEO notes, however, that’s increasingly unviable.
“In a world where nearly everything is available almost instantly, it doesn’t make sense to have to manually fill out forms and wait for them to be processed before you can make an international money transfer,” he says. “And that’s just one example of the inefficiencies found in the status quo.”
Fortunately, he adds, disruptive fintech companies including Future Forex itself, are using their technological prowess to disrupt the sector.
“When we launched our international money transfer service at Future Forex, we did so because we’ve seen first-hand how frustrating the traditional approach can be,” he says. “But we could also see that it didn’t have to be that way and that the experience could be much simpler and more user-friendly.”
“Unlike banks, we recognised the opportunity for disruption and could tackle the problem head-on,” he adds. “But we also knew that we had to pair technological solutions to international money transfers with transparency and exceptional customer service. People are incredibly tied to their banks when it comes to financial matters, so you need to give them more than one reason to switch.”
As Scherzer points out, independent players in the sector are more agile, meaning that they can make changes far more rapidly than traditional banks.
“We recently launched a new online platform, which makes the money transfer process more convenient and easier to navigate than ever before,” he says. “We were able to execute it in six months, whereas at a big bank, that is likely tohave been a multi-year project.”
A business and economic enabler
As the space gets more competitive, Scherzer expects innovations to come even faster. This, he says, should benefit customers of all sizes and across a broad swathe of industries.
“We live in a world where people expect to get what they want as easily and efficiently as possible,” he says. “That applies to everything, including international money transfers. The companies that understand this and are prepared to chase bold innovation will win out in the end.”
PERSONAL FINANCE