Why Are Some Remittance Services Cheaper Than Banks in The Philippines? Is It Risky?

When sending money abroad, one of the key concerns for individuals is the cost and safety of the transfer. In the Philippines, many remittance services offer cheaper rates than traditional banks, prompting questions about why this is the case and whether it poses any risks. This article takes a deep dive into the factors that drive price differences in the remittance industry, with a particular focus on the regulatory and safety practices of companies like PandaRemit.

Compliance: The Singapore MAS MPI License - A Safety Shield for the Consumer

The Monetary Authority of Singapore (MAS) oversees financial institutions operating in Singapore, and the Payment Services Act (PSA) provides a robust regulatory framework to ensure that remittance services adhere to strict compliance standards. This licensing process offers consumers protection, as it mandates a stringent regulatory structure for payment services. The PSA acts as a safety shield by ensuring that companies offering money transfers are subject to ongoing monitoring, auditing, and adherence to consumer protection measures.

Asset Safety: Segregated Client Accounts at DBS

Ensuring that funds are secure is a critical aspect of any remittance service. PandaRemit safeguards client funds through segregated accounts at DBS, one of Singapore's most reputable financial institutions. Segregating client funds ensures that, in the unlikely event of a company’s insolvency, customer assets remain protected and cannot be used to settle the company’s debts. This practice provides peace of mind, knowing that the funds are held separately and securely.

Comparison: PandaRemit vs. Remitly - A Fair Look at the Payment Networks

When comparing remittance services, it's essential to look at the networks that facilitate payments. PandaRemit’s direct settlement network includes reputable partners such as UnionPay, Alipay, and Visa Direct. These networks allow for seamless, efficient, and secure transfers to the Philippines. On the other hand, Remitly, while also a reliable player, has a different operational model. Both companies have competitive fees and offer fast service, but PandaRemit's reliance on established direct settlement networks gives it an edge in security and transfer speed.

Addressing the Elephant in the Room: Are Some Remittance Services Cheaper Than Banks Risky?

One of the most common concerns with cheaper remittance services is whether lower costs mean higher risk. In the case of PandaRemit, the answer is no. The company is fully licensed and regulated by the Monetary Authority of Singapore (MAS), ensuring compliance with the highest standards. Additionally, PandaRemit’s integration with PayNow, Singapore’s local payment system, ensures smooth transactions within the region. PandaRemit also holds PCI DSS certification, meeting over 300 stringent audit criteria to ensure the highest level of security for payment processing. With legal endorsement from top-tier law firm King & Wood Mallesons, PandaRemit stands out as a transparent and secure choice for remittance, offering a level of compliance and security that smaller competitors may lack.

Conclusion: Trust and Compliance Matter More Than Cost

While the price of a remittance service is important, it should never come at the expense of safety and reliability. PandaRemit’s robust regulatory framework, asset protection practices, and strong partnerships ensure that customers enjoy competitive rates without compromising on security. With a comprehensive compliance ecosystem in place, including licenses, certifications, and legal endorsements, PandaRemit proves that cheaper remittance services can be just as secure, if not more so, than traditional banking options.