In our latest podcast episode, we embark on a deep dive into the intricate world of international money transfers. We explore a range of methods, from traditional banking solutions like SWIFT to innovative options like Payouts to Cards. We discuss the advantages and disadvantages of each method, helping you understand the nuances and make informed decisions. Whether you're a business owner or an individual, this episode provides valuable insights into optimizing your global payment strategies.
- Hey everyone, welcome back, ready for another deep dive.
- Absolutely.
- Awesome. Today, we're tackling something super relevant for, well, pretty much anyone in the fintech space, really.
- Yeah, definitely crucial.
- We're talking about all those different ways to move money around, money transfer methods, especially for folks building platforms, picking the right one, or maybe even a few, it can make or break the whole thing.
- No doubt about that.
- So, that's what we're gonna unpack today.
- Sounds good.
- Now, think about it. You've got your freelancer over in Europe, right?
- Okay, yeah.
- Done some amazing work for a client in, say, the US, they're waiting to get paid. What's going through their mind? What matters most when you're on the receiving end of that transfer?
- Well, first of all, I'd say speed, right?
- Right, sure, yeah.
- Nobody wants to be twiddling their thumbs, waiting for their hard work and cash, especially when it's gonna hop across borders. Then there's the fees, got a factor that in. You don't want a big chunk of your payment disappearing just to get it from point A to point B. And naturally, peace of mind, knowing it's secure, reliable, that's huge.
- Absolutely. So let's break down some of these methods,
starting with, I guess, the one everyone knows, Swift. Been around forever. But how does it hold up in today's world where everything's like instant?
- Right, well, Swift, it's definitely old, reliable in a way. Global reach, almost any currency, you can think of, no limits on how much you can send, perfect for those massive payments, real estate or big business deals. But yeah, you're right, it's not known for being speedy. We're talking up to a whole week sometimes for a transfer to go through. Not exactly ideal when time is of the essence. Plus you've got fees, usually it's around 0.3% of the amount, plus another 10 bucks or so, maybe more, can add up, especially if you're dealing with smaller payments.
- Right, so Swift, it's got that global coverage, but might not be the best fit if you need things fast or you're watching every penny. Speaking of fast, what about those card networks? Everyone uses Visa, Mastercard, that kind of thing. Those are known for being pretty quick, aren't they?
- Yeah, they are. I mean, we've seen transfers between continents literally across the world, clear in half an hour using those networks. That's a huge difference compared to Swift. Plus everyone knows those cards, except them. It's super convenient.
- 30 minutes, that's amazing. How do they do that though? What's the secret sauce behind those super fast transfers?
- It's all about the infrastructure, really. Decades of fine tuning, you know?
- What?
- Huns of investment in tech, a massive network of financial institutions all working together smoothly, it's impressive, but of course, there are trade-offs. There are usually limits on how much you can send, often around 10 grand, and there are still fees. They're not outrageous, but usually about 1%, maybe a little extra tacked on.
- Got you. So, super speedy, very convenient, but maybe not the best
for when you need to move serious amounts of money. Now I'd be like, we can't ignore this next one. Crypto. Everyone's talking about it. Promises near-instant borderless transactions.
- It's really all it's cracked up to be though, especially for fintech platforms. What's your take?
- Crypto, it's definitely got that cool factor, that futuristic vibe. And sure, you can send money across the world in minutes, sometimes as fast as five minutes flat. It's exciting, but there's a reason why it was completely taken over. It's unpredictable.
- Right, volatile.
- Exactly. You see Bitcoin, for instance, swinging wildly hundreds, even thousands of dollars up or down in a day, it's risky. You send a thousand bucks, and bam, it could lose a good chunk of its value overnight because the market took a dive.
- Not exactly ideal for peace of mind.
- Not at all. Then there are the fees that can be pretty hefty. If 1% to 2% is common, sometimes even higher than those traditional methods, plus the whole regulatory side is still a bit of a wild west, different rules everywhere you go.
- Yeah, so crypto, huge potential, but definitely some kinks to work out. Now, for our European listeners. Let's talk about SEPA. It always gets praised for being so efficient and fast. What's the catch? There's doubt anyone, right?
- SEPA, it's like the gold standard, if you're sending euros within the EU, super fast, most transfers happen the same day, maybe the next day tops, and it's cheap, auction less than a single euro for the whole thing, is like the auto bond of payments, just zip in a long.
- That's incredible, but there has to be a downside.
- Yeah, the trade off is, it's limited to euros, and only within the EU, not a global solution.
- Right, each tool has its purpose.
- Exactly.
- So, what about those options that are a bit more localized? Payouts to wallets, using local cash out networks, that sort of thing, when do those make sense?
- Those are great when you're catering to a specific region, especially where mobile wallets are huge, we've seen it firsthand at Verestro. This approach can be super effective in, say, emerging markets.
- Interesting.
- But the downside is there's no real consistency across all the different providers and regions, speed and cost or all over the map and trying to integrate with all of them, it can get messy.
- I bet. So perfect for a niche market, but tough to scale globally.
- You got it.
- Now, I gotta ask about this next one, it sounds kind of futuristic. Virtual cards. How does this even work for sending money? It's like beaming it across the internet.
- It's pretty cool, actually. Think of it like this. You issue a virtual card instantly. Then you just send the con details to whoever's getting the money. They can use it online at an ATM. Any place that takes a regular card. It's fast and surprisingly, super cheap, often even less than a normal card transfer.
- Wow, so no physical card needed at all.
- Exactly.
- That's awesome, but is everyone comfortable with that? Using a virtual card, it seems pretty new.
- Yeah, you're right, not everyone's used to it. Some people might be a little hesitant at first. That's why we at Verestro believe in having lots of auctions available, different folks need different tools.
- Makes total sense. Now, what about those local or national payment schemes? ACH for example, that's pretty big in some countries, isn't it?
- Oh yeah, definitely. You see them a lot in the US. They're great for moving money around within a specific country, really quick, cheap and standardized. Often the most cost effective way to do things.
- Cost great.
- The thing is usually you need a banking license to integrate with them. That can be a barrier for some Fintech companies. And of course, there's no global standards. So if you're operating in multiple countries, you're looking at multiple integrations.
- Right, so fantastic for local stuff. But tricky to take worldwide.
- Yeah.
- Wow, we've covered a ton of ground here. It's clear that each method has its pros and cons. What's the bottom line for our listeners? If they're trying to pick the best options for their platform, where do they even begin?
- The key is knowing your users, understanding what they need.
Are they sending big amounts internationally as speed’s their top priority? Are they focused on a specific region or are they going global? Once you've got to handle your audience, you can start narrowing down which methods make the most sense.
- So it's less about finding the perfect solution and more about picking the right set of tools.
- Bingo. And at Verestro, that's exactly how we built our Fintech as a Service platform. We make it super easy for fintech companies to integrate all sorts of money transfer methods, giving them that flexibility to meet all sorts of needs. So for example, if a fintech is operating in Poland, we'd probably suggest they focus on a SEPA and local ACH integration. In Ukraine, card payouts are super popular. And in the US, it's all about that combo of Swift and local systems like ACH.
- Sounds like you guys have really thought this through. What advice would you give to those fintech founders and developers out there who are feeling a bit overwhelmed by all these choices, all the complexities of trying to integrate this stuff?
- Don't try to do it all alone. Integrating all those different payment methods, it can be a real headache and it takes forever. That's where we come in. We take care of all that technical stuff, the compliance, the security, so you can focus on what you do best, building awesome products and making your users happy.
- This has been incredibly insightful. It really underscores how important it is for fintech companies to have a diverse toolkit, all those different money transfer options to cater to all sorts of users wherever they are in the world. And leaves us with a really interesting question for our listeners. What innovative ways can fintech companies use these different methods to go beyond the basics? To create a truly fantastic user experience that keeps people coming back for more? Something to think about as we wrapped up today's deep dive.
Read more about global money transfers: https://developer.verestro.com/books/knowledge-center/page/various-forms-of-money-transfers
