Remittances are essential for connecting millions of families, whether it’s supporting them with funds for small goods or healthcare, or contributing capital to their business ventures. Traditionally, the industry has been disrupted with manual transfers, high fees, long settlement times, and security risks. Open banking entered the fray as a means to innovate with a user-friendly alternative that’s seamless, lower-cost, and much more efficient.

Yapily has seen first-hand remittance companies put open banking to the test for improved conversion rates and a vastly superior customer experience. So the money gets to where it matters.

What are the traditional challenges for remittances?

Prior to the existence of open banking, and still often seen, users had to visit physical branches to send money, or had to use online platforms which require manual entry of bank details. Both can be lengthy processes which leave customers vulnerable to manual errors or security risks. One wrong digit and the money can’t be sent. If the money manages to be sent off with no issue, the transaction could take days to process and high fees prevent the full amount being received. Understandably, users are demanding a better alternative solution.

How does open banking solve the remittance problem?

Open banking leverages secure APIs to connect banks, financial institutions, and users, all underpinned by regulatory frameworks like PSD2. Having these direct connections can have a range of benefits for remittance companies and their users.

Benefits for the user’s experience:

• Simplified onboarding: With no manual entry of details, the effort and risk of error are both reduced. Users instead are required to authorise remittance providers to access their details securely and use Strong Customer Authentication (SCA).
• Speedy transactions: Remittance payments are quicker than ever and processed almost instantly as the transfer is direct with fewer intermediaries.
• Lower costs: With fewer intermediaries also comes a reduced cost and lower transaction fees, overall a win for the customer.

Benefits for the business’ conversion rates:

• Streamlined payments: Frictionless transfers help reduce worries of cart abandonment, instead leaving room for faster, smooth, and more secure transactions.
• Increased trust and security: With strict regulatory standards to maintain high security levels and data protection, this helps increase trust to help gain and retain your customers.
• Personalised offering: Access to financial data helps remittance providers offer tailored services to overall increase conversion and enhance their experience.

Get your guide to open banking security.

What the future holds for remittances and open banking

Open banking adoption still has so much room to grow, but with its vast potential, remittance companies can make it part of their financial strategy to enable happier customers, increased conversions, and a more streamlined experience. The future looks bright for remittance and open banking to collaborate for greater innovation and a more inclusive financial ecosystem.

Speak to one of our open banking experts who can help your remittance business transform today. Enhanced experience, better results.