Are Payment Apps the Future of Banking?
Online-only money transfer organizations are making international money transfers easier than ever. Many online-only payment organizations have mobile applications available to their users now – which makes it possible for users worldwide to transfer money on-the-go, whenever they need to.
Additionally, the plethora of online money transfer organizations that have cropped up in recent years offer money transfer services with incredibly low fees and the best foreign exchange rates available. Banks that provide similar transfer services or fund wiring have been struggling to keep up, as their fees tend to be much higher and they often use exchange rates that they can benefit from rather than the most up to date rate.
How do payment apps work?
Payment apps are incredibly simple, making their appeal even greater. For many, you plug in the currency you’re looking to transfer, the application tells you your fees and the exchange rate, you can either accept or decline those fees and that rate, then your transfer or payment is processed. All of this, of course, conveniently takes place on your computer, tablet, or mobile device. The multi-platform availability is certainly part of what draws users in. However, the lack of high transfer fees is what keeps them coming back for future transfers, as well. These fees are significantly lower than anybody would find at a traditional brick-and-mortar bank.
What are banks doing wrong?
While many banks provide international money transfer services or wiring, they can’t compete with these online-only money transfer organizations and their advanced payment apps. That’s because banks aren’t always using the most up to date, or best, exchange rate. They also are charging significantly higher fees for their transfer services. In some ways, this makes sense. Banks are brick-and-mortar, they have to find a way to keep the lights on. They also have to abide by a large number of regulations and processes that have been set in place for a long time. Newer, more modern payment companies don’t have brick and mortar locations. Their sole dedication is to ensure that users get top-of-the-line transfer services with low to no additional fee payment. This is helpful, especially as the world becomes a more globalized environment. Younger, more tech-savvy users are coming on the scene, and they’re both living and working abroad. Sending international payments has become a necessity.
Additionally, while many banks allow a wire transfer to be submitted online, they don’t have a service that’s specifically dedicated to international payments. This means their apps aren’t as up to date, they aren’t as user friendly, and their marketing will still push patrons to go to a brick-and-mortar location to complete their international payments. This is a major inconvenience, especially for those who are on the go abroad. Given these key factors, payment apps are slowly eating away bit by bit at traditional banks.
An Overview of Different Payment Apps
While there are a wide variety of payment apps available, there are a few prominent ones that rise above the rest: TransferWise, World First, and PayPal.
TransferWise’s primary offering is low fee transfers. They’re easy to use, and incredibly straightforward in their communication.
World First offers a wide variety of account types so that they can tailor their offerings to your unique situation. For example, they offer business accounts to make international payments easier for a global business.
PayPal is convenient and incredibly well known. They can be used worldwide. However, they do charge fees for other services, such as invoicing, which can be a burden for business owners.
While there are many money transfer companies out there, these three tend to be the most discussed as far as convenient mobile applications go. World First is one of the organizations that has the most available currencies for transfer. They also have the most types of accounts available to their users. However, you should research each company you’re considering to make sure they can address your unique money transfer needs. No matter what kind of international payment services you’re looking for, there are definitely options available to you.