The battle for the remittances market in the US and around the world is intensifying as migrants are making strenuous efforts to send remittances to help their families back home amidst the ongoing COVID-19 pandemic. But, for many immigrants, the question remains whether sending money to their loved ones will ever be cheaper than it is now?
Traditionally, conventional banks have been slow to respond to this question effectively. But, a new generation of fintech has disrupted the remittances market by offering money transfer services for lower costs. All this has happened during the past decade. However, the battle for slashing down transaction fees is still going on. Sending money to poorer countries remains very expensive.
This may change at least in the US for now.
The Halal Times staff recently discussed the cross-border payments issue with Mr. Khalid Parekh, the CEO of a US-based neobank called Fair. The fintech startup has a radical plan to slash transaction costs for sending international remittances. It offers a no-hidden-fee mobile money transfer service from the US to the rest of the world. It plans to expand its geographical scope and introduce other banking services to its customers in the coming months.
Typical users of Fair`s remittance and other digital financial services are minorities or immigrants. Currently, America hosts more than 47 million migrant workers. A large number of these people want to be able to send money to their loved ones back home by paying the lowest possible transaction fees.
The bank charges no commission or other fees for international remittances or any of its other banking solutions. It eliminates all banking charges via a monthly or lifetime membership model. It offers the highest possible exchange rates available in the market for international remittances.
Its mantra is to help people of all races, religions, and ethnicities. It serves as a consumer-to-consumer business model where there are no intermediaries to make a profit from the hard-earned money of migrant workers.
Parekh started Fair for very personal reasons. He came to the US in 1998 with $100 in his pocket, no knowledge about the US banking system but a strong desire to help his poor family in India by sending them whatever small amount of money he could.
He also noticed that low-income people and immigrants could hardly find any suitable investment, retirement, and insurance services at the time.
Before Fair, he has had the experience of founding and running a successful company, AMSYS Group. Currently, it is valued at around $350 million. Being a successful entrepreneur, he offers digital banking services by emphasizing people over profit.
His mission is to help fix the leaks in the remittance transfer system by reducing transaction costs on migrant workers` remittances to zero. Fair is the answer to the questions he had to face as a newly arrived immigrant to the US 22 years ago.
But, is he alone in offering such services to the community he belongs to?
There are a plethora of neobanks targeting similar demographics. They include but are not limited to Greenwood, Fardows, Cheese, and Welcome Technologies. Fair wants to set itself apart from the competition by offering no-interest lending, investment, insurance, and retirement services under one platform. Its mobile app is available in English with Arabic and Spanish versions coming next. The company provides 24/7 customer support.
Fair is also set apart by its membership approach. The average US consumer will lose hundreds of dollars to excessive and unplanned bank fees each year. Fair eliminates this with a transparent membership model that promises no hidden or additional fees.
Their products are fully compatible with the Shariah law for Muslims. They also comply with Jewish law by banning interest rate in any of it form and shape.
Fair has started offering no-cost remittance and other banking services to its members. It provides free mobile payment transfer services internationally. The word of mouth is playing an important role in making its digital banking solutions more acceptable even among the poorest segments of the immigrant community in the US. Its business model makes it possible to send smaller remittances. This approach seems to be working with the potential customers as they are becoming members and sending larger volumes of remittances.