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

When sending money to Indonesia, many customers wonder why some remittance services are cheaper than traditional banks. While lower fees might seem appealing, it’s important to understand how these services operate and if they are safe. In this post, we’ll break down the key factors contributing to the cost differences and explain how you can send money with peace of mind, knowing your funds are protected.

Compliance: A Safety Shield for Your Transactions

One of the most important aspects of any remittance service is compliance with local regulations. PandaRemit, for example, holds an MPI License issued by the Monetary Authority of Singapore (MAS). This license ensures the company adheres to the stringent requirements set forth by the MAS Payment Services Act (PSA). The PSA provides a comprehensive framework for overseeing payment services in Singapore, including money transfer services, which means your transactions are subject to strict regulatory oversight. This is a vital layer of security that ensures remittance services are operating within legal boundaries, protecting consumers from potential risks like fraud or mismanagement of funds.

Asset Safety: How Segregated Client Accounts Keep Your Money Secure

At PandaRemit, client funds are protected through segregated client accounts at DBS, a well-known and trusted financial institution. This means that your funds are kept separate from the company’s operating funds, ensuring that your money is not at risk should the company face financial difficulties. Segregation of funds is a key practice in safeguarding your assets, providing an extra level of protection against potential risks, and ensuring that you are always able to access your money when you need it.

Comparison: PandaRemit vs. Remitly

While services like Remitly are popular, it’s important to assess the reliability and transparency of the payment networks they use. PandaRemit, for instance, operates a direct settlement network with trusted partners such as UnionPay, Alipay, and Visa Direct. These well-established networks are known for their reliability and secure payment processing, ensuring that your funds are sent quickly and safely. In comparison, while Remitly also provides fast services, PandaRemit’s integration with local compliance systems such as PayNow in Singapore provides seamless and more secure local transactions, reinforcing its commitment to safety and transparency.

Fact-Checking Common Doubts: Is PandaRemit Safe?

Addressing common concerns, let’s clarify why some people may question the safety of cheaper remittance services. Many worry that lower fees equate to less security or reliability. However, PandaRemit holds a high-level license from the Monetary Authority of Singapore (MAS), offering a robust regulatory framework that ensures transparency and legal accountability. Furthermore, PandaRemit’s commitment to security is reinforced by its compliance with the Payment Card Industry Data Security Standard (PCI DSS), the strictest financial payment security standard that covers over 300 audit criteria to protect your personal and financial information.

In addition to its technical security, PandaRemit’s business processes have been evaluated and legally endorsed by King & Wood Mallesons, a top-tier law firm. This independent legal endorsement provides an extra layer of assurance, demonstrating PandaRemit’s commitment to maintaining high standards of operational and legal integrity. While smaller competitors may not offer such extensive compliance and transparency, PandaRemit’s partnerships with industry leaders such as Sequoia and IDG Capital show its dedication to both safety and growth in the remittance industry.

When using PandaRemit, you can be confident that your funds are not only being sent quickly and at a lower cost but also being protected by a comprehensive compliance and safety framework designed to offer peace of mind.