Fintechs could save migrant workers £520m in international money transfer fees
Fintechs could save migrant workers a combined £520 million when moving money from the UK to emerging economies, according to new analysis by Edinburgh-based fintech Paysend.
Each year, migrant workers in the UK send £8 billion back home. While the average global transaction fee is currently 7% of the money transferred, the fintech average is already well below 2%.
Combined, these savings mean migrant workers in the UK could send up to £520m more back home each year if they move money with lower cost fintech businesses.
The UN has previously called for money transfer fees to drop to 3% to boost education spending in emerging markets. This analysis shows many new fintech start-ups are already below 2%.
Ronald Miller, CEO of Paysend, said: “Moving money changes lives. Money transferred might go on education, healthcare, or give families the ability to buy a home or start a business. Rather than simply acting as a ‘hand out’, research shows that money sent back home creates independence and sustainability, for the recipient and their communities.
“Paysend’s card-to-card money transfer service, Global Transfers, enables our customers to move money in an instant. With fixed, transparent and low fees, more of our customers’ money is enjoyed by those they care about.”
Paysend examined the fees applied to money transfers of £1000 from leading fintech companies. The research revealed average transaction fees are well under 2% for all fintech businesses assessed.
With Paysend’s flat fee transaction of just £1, people currently subjected to the global average 7% transaction fee could save up to £65 on a £1000 transfer.
Global money transfers will soon overtake foreign direct investment as the biggest inflow of capital into developing countries. The World Bank predicts that 290m migrants will send $689bn back home this year.