The international money transfer world is evolving, with new disruptors emerging from all corners of the tech and social media space. They are shaking up how things should be done, and it won’t be long before traditional providers will need to evolve to a new way of transferring money around the world, or face being left behind.
Preliminary research from the finder Money Transfer Awards 2017 found that while most Americans who send money overseas don’t like their provider, one of the biggest issues facing the industry is trust. Ironically, trust scored low while user experience was high.
The finder.com study of 2,005 American adults found that just 4% are happy with who’s moving their money. Furthermore, 80% of those consumers felt ripped off by their money transfer provider.
Where’s the trust?
Clearly, trust in the international remittance industry is at an all-time low. The process to send money for some of the established players has fallen short when reality has not met a user’s expectations. It is likely to come as a shock when information is missing, or the funds won’t send, while the website is clean and attractive with a simple interface.
How have providers dropped the ball on trustworthiness? Here are a few reasons.
1. They hide fees in the exchange rate
Money transfer operators are notorious for rolling hidden fees into the exchange rate. Needless to say, consumers don’t like this.
Let’s say a consumer wants to transfer $100 to France. Right now, his $100 may be worth 95 Euros at the market rate (or what’s known as the mid-market rate). However, a money transfer provider may convert his money to 92 Euros instead, pocketing the difference of three Euros.
This is a widespread practice throughout the industry. The problem isn’t necessarily that providers do it — it’s that they rarely let consumers know. This results in consumers losing big chunks of their money without any idea why.
2. They make it difficult to find answers to pressing questions
Once consumers visit a money transfer provider’s website, they likely have multiple questions. These may include how much it’ll cost to send money overseas, how long the transfer will take and what they can expect from the transfer process. These questions must be answered quickly for the consumer to feel comfortable entrusting money to a remittance company.
Most money transfer providers have a lot of work to do in this regard. While they are generally quite transparent about their fees, the same cannot be said for their exchange rates. They usually restrict information by forcing consumers to sign up for accounts to receive a quote on the cost of a transfer. And they can make consumers dig through website FAQs just to get straight answers to basic questions.
It’s not surprising that consumers are tired of all the obfuscation. Providers should take note before their customers find better answers from the competition.
3. They’re not completely reliable
This may come as a surprise, but some providers that we tested didn’t complete the transfers with a 100% success rate. That’s a problem when consumers are relying on a provider to consistently send significant amounts of money overseas.
It’s understandable that so many money transfer customers are dissatisfied when they reach the end of the process and find out that their money was taken from their account, but the provider couldn’t complete the transaction and will send the funds back to the customer within a week or two.
Providers need to do a better job at alleviating their customers’ anxieties. A start is by making sure their transfers are always successful before the cash is exchanged, and keeping their word about their estimates on delivery times. Next, they should work on keeping customers updated during every step of a transfer. Because money transfers can be complicated, providers should simplify the process for their customers as much as possible.
4. Money transfer providers need to become more trustworthy
The world of money transfers is evolving fast, and it is time for the older players to take a look at how they interact with their customers. Soon, transparency won’t just be optional — it’ll separate the industry’s winners and losers.
To change, providers just need to be honest with consumers. They need to profit not by running bait-and-switch operations, but by offering services that customers are delighted to pay for.
As more consumers learn how the industry works and which providers are building a reputation on transparency, they’ll become increasingly discerning about who they trust with their money. And they will inevitably choose providers who are worthy of that trust.
