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

In recent years, the landscape of cross-border money transfers has evolved significantly. Many remittance services now offer competitive pricing compared to traditional banks. While this shift benefits consumers, questions often arise about the risks involved. Is it safe to use these cheaper services, or are there hidden dangers that users should be aware of? In this article, we’ll explore why some remittance services are cheaper than banks, and how to evaluate their safety and regulatory compliance.

Compliance: The Safety Shield of the Payment Services Act (PSA)

In Singapore, the regulatory framework for payment services is governed by the Payment Services Act (PSA), which is overseen by the Monetary Authority of Singapore (MAS). The PSA aims to provide a robust legal environment for payment service providers, ensuring that they operate transparently and securely. Remittance services, including PandaRemit, which holds a high-level license from the MAS, are required to comply with strict regulatory standards under the PSA. This regulatory framework acts as a safety shield for consumers, ensuring that service providers are held to high standards of conduct and transparency, reducing the risks associated with remittance services.

Asset Safety: DBS Segregated Client Accounts

One of the core pillars of consumer safety in remittance services is the safeguarding of funds. PandaRemit uses segregated client accounts at DBS Bank, one of the leading financial institutions in Singapore. These accounts ensure that user funds are held separately from the company’s operational funds, providing an additional layer of protection against any potential financial instability or operational risks. By keeping client funds in a segregated account, PandaRemit ensures that users' assets remain secure, even in the event of unforeseen issues or disruptions in the service.

Comparison: Remitly vs. PandaRemit

When comparing remittance services, it’s essential to evaluate both pricing and reliability. Remitly, one of the well-known competitors in the remittance market, offers competitive rates and a wide range of payment options. However, PandaRemit stands out for its direct settlement network, which includes partnerships with trusted financial entities like UnionPay, Alipay, and Visa Direct. These partnerships ensure that users can send money securely and quickly, with a higher level of reliability compared to other providers. Additionally, PandaRemit’s focus on regulatory compliance and transparent operations sets it apart, offering a level of security that smaller competitors may lack.

Addressing the Elephant in the Room: Is It Risky?

Many users wonder whether cheaper remittance services carry more risk than traditional banking services. The short answer is that price is not necessarily an indicator of risk. In fact, services like PandaRemit are designed to provide users with competitive pricing while adhering to the highest safety and regulatory standards. PandaRemit’s compliance with the MAS Payment Services Act, along with its use of segregated client accounts and dual-layer data security, ensures that users’ funds and personal information are protected. Furthermore, PandaRemit’s PCI DSS certification guarantees that it meets the world’s strictest financial payment security standards, which include over 300 audit criteria. When choosing a remittance service, consumers should prioritize compliance, transparency, and data security over just price.

Conclusion: The PandaRemit Advantage

In conclusion, while some remittance services are indeed cheaper than banks, it’s essential to evaluate them on more than just cost. PandaRemit, for example, offers a high level of regulatory compliance, asset protection, and data security, making it a reliable choice for users seeking both affordability and peace of mind. With a strong foundation in the MAS-regulated ecosystem, segregated client accounts, and PCI DSS certification, PandaRemit provides a safe, transparent, and cost-effective solution for cross-border money transfers.