Remember the medieval times when people used to go to the bank to perform the simplest, most basic financial operations? Thank goodness that’s over and you can recharge your mobile or send your friend the money you owe for movie tickets quickly and painlessly.
A transparent and collaborative payment ecosystem is a must today. The conservative approach to transferring money is fading as Millennials and Generation Z hit the stage. They want quick and easy solutions for the everyday routine — no papers, no queues. If a bank doesn’t provide a simple solution, they’ll look for it somewhere else.
The little kids running around today — when they become adults — they will never hear the words ‘three-to-five business days.
Trends that banks should keep an eye on
Banks and remittance giants are in fierce competition with emerging FinTech startups that are offering new apps to make customers’ lives easier. Even the reputation of household names in the banking industry won’t guarantee their success if they don’t keep up with innovations. Big players such as Western Union are already feeling the pressure of FinTech startups and are investing in transforming their conservative business models into digital ones.
To survive, companies have to come up with solutions that align with three global trends:
- Increasing consumer demand for digitalization
- Enforcement of regulations
- Merging of the payment processing and money transfer industries
Do online money transfer platforms follow these trends?
Yes, they do. Innovative digital solutions are the answer to the demand for real-time, agile, and personalized services. Moving from traditional models to online services has proven highly profitable: in 2017, TransferWise, an international platform for money transfer, reported revenue of £67 million.
How is it that it’s free to send an email and it costs to send money? Why does it have to cost much at all, when we’re moving bits and bytes around?
With the growing popularity of distributed ledgers, people can benefit from the broader functionality of online payment apps. Some money transfer platforms use Bitcoin and blockchain technology to move significant sums across borders without giving cryptocurrency directly to their customers. Ripple, one of the largest blockchain companies, has partnered with over 100 financial institutions to provide its technology for cross-border payments.
Cross-border payments flow
Customers increasingly prefer communicating through UX-driven online platforms instead of communicating directly with company representatives. Getting help online is faster, more transparent, and less frustrating. In 2018, US banks and credit companies achieved the highest level of customer app satisfaction of any industry according to the US Banking App Satisfaction Study and the US Credit Card App Satisfaction Study. The money transfer market is huge, and people like to take advantage of the latest technologies when it comes to their hard-earned money.
Wondering how to create custom, cutting-edge online money transfer software to keep your customers satisfied and loyal? Luckily, Intellias has experience building FinTech solutions and can provide expert advice.
Critical features of software for money transfer
Money transfer platforms require specific functionality that will not only ensure the best user experience but also comply with strict payment regulations and data privacy laws.
Here’s a list of essential functions that an up-to-date money transfer service should include:
- Mobile top-ups and utility bill payments. Let customers pay their bills or top up their friends’ and family member’s phones from anywhere and at any time while bringing in additional revenue.
- E-wallets. There’s no need to carry a bag of cash and create multiple bank accounts for every country your clients visit. Let them deal with only you, pay more easily, and budget more effectively — and keep them loyal.
- Online ID check. Run automated KYC registration and verification requests when sending money over a set limit to make your clients feel protected.
- Payment statistics. The ability to visualize and analyze transactions by volume, receiver, status, country, and so on helps your customers manage their finances better and use your money transfer software system for more than just remittances.
- Notifications and alerts. Push notifications and SMS alerts allow users to stay informed about transaction statuses, important payments, and regular money transfers (monthly subscriptions, for example).
- International transfers and currency exchange. Allow your clients to enjoy stress-free cross-border money transfers with low fees or send dollars and receive euros in just a few swipes.
- Multi-lingual interface and support. Why concentrate on one language when you can expand your audience worldwide?
- Integrations. Access to global banks and MTOs is open to you via APIs, FTP, and other protocols.
On the backend, you have to offer your customers the highest level of data protection. This means compliance with legal requirements, confidentiality, secure system logs, different options for user authentication, and more. Intellias’ FinTech experts know a thing or two about data protection, so don’t hesitate to ask.
How to create money transfer software in five steps
Developing this type of complex FinTech solution requires a team of around 15 money transfer software developers. At least some of them should have previous experience with payment systems and FinTech platforms. Their work should consist of the following:
1. Developing transaction and money transfer functionality
Your experts will work on allowing users to make local and international transfers in various currencies from your website or mobile app in order to pay bills, top up phones, and exchange currency. E-wallet development is included as well. Your customers should be able to deposit money via PayPal, bank account, and credit or debit card; send and receive e-wallet funds through multiple channels in many countries; set transaction restrictions based on sending/withdrawal limits, age, and number of transactions per day; and do a whole lot more.
2. Building CRM and user management modules
You’ll need various permissions and user interfaces for different roles within your system: admin, auditor, cashier, and so on. You should be able to monitor activity, activate and deactivate accounts, and view balance histories. You should also be able to run marketing activities on customers who meet specific criteria, send emails and SMS messages, set up promo codes for target users, and more.
3. Working on reporting and accounting
Real-time tracking and historical data should be available for analysis. Users should be able to monitor transactions as well as run advanced reports and generate balance sheets, evaluate profits and losses, and set general limits throughout the entire money transfer system.
4. Building a user-friendly UX
Developers have to ensure access to your money transfer app through desktops, tablets, and smartphones, build a multi-lingual custom interface for different roles, and support customized white labeling. Developers need to conduct a UX review and make sure that your dashboard is user-friendly, that clients can work in areas of limited connectivity, that access to the system is smooth via all possible devices, and that users can set up and receive all necessary notifications and alerts.
5. Ensuring compliance and security
Your team of experts should take care of KYC, AML, and counter-terrorism financing compliance. They might also implement functionality for blacklisting suspicious senders and receivers and for adjusting the app to local regulations and your own business rules. Basic functionality consists of data encryption, backups and recovery, limited access to certain parts of your system, session time limits, and other features.
A team of money transfer app developers can be divided into smaller Agile teams, each working on a particular task. Down the road, the team can interact with stakeholders and add necessary custom features, run testing rounds and UX reviews, release prototypes with limited functionality, build an MVP, and so on depending on the working model adopted at the beginning of cooperation.
Market demand and rules of competitiveness dictate the course of digitalization for financial services in general and the money transfer industry in particular. Banks and remittance companies are becoming platform players and rationalizing their infrastructure by aiming at cost-efficiency and customer satisfaction.
Open APIs and alternate payment channels require innovative apps with customized functionality. Distributed ledger technology brings a new meaning to cross-border transfers and especially the fees for them. To face these changes and take advantage of innovations, existing companies have to partner with FinTech companies, and businesses should reshape and expand their offices with development centers. All that works toward a single goal — to provide the consumer-driven digitalization.
Contact us and keep up with the trends! Learn more from Intellias FinTech software engineers.