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

In recent years, remittance services have become a popular alternative to traditional banking for sending money across borders. While some remittance services are significantly cheaper than banks, many customers often question the risks involved. This article dives deep into why remittance services may offer lower costs and assesses the associated risks, especially when sending money to and from Thailand.

Compliance: The Safety Shield of Remittance Services

One of the key aspects that determine whether a remittance service is safe or not is its regulatory compliance. PandaRemit, for instance, operates under the strict guidelines set by the Singapore Monetary Authority (MAS). As a licensed entity under the MAS’s MPI (Major Payment Institution) License, PandaRemit must adhere to stringent compliance requirements. This license guarantees that the company meets high standards for risk management, consumer protection, and operational integrity.

The Payment Services Act (PSA) in Singapore acts as an additional safety shield, ensuring that companies like PandaRemit are thoroughly regulated. The PSA covers a wide range of payment services, from electronic money transfers to merchant payment services, and ensures that businesses comply with robust financial and anti-money laundering standards. By operating under this framework, PandaRemit provides users with the reassurance that their transactions are safeguarded by one of the world’s most reliable financial regulatory systems.

Asset Safety: Segregated Client Accounts at DBS

Another critical factor for users seeking secure remittance services is how the company manages client funds. PandaRemit, in partnership with DBS, uses segregated client accounts to ensure that customer funds are kept separate from operational funds. This is a vital safeguard because it means that in the unlikely event of a company insolvency, customer funds remain protected. DBS, one of Southeast Asia’s leading financial institutions, ensures that PandaRemit complies with the highest standards of financial integrity, ensuring peace of mind for all users.

Comparison: Wise vs. PandaRemit

When comparing PandaRemit to other remittance services such as Wise (formerly TransferWise), it’s important to understand the strengths each service brings. While Wise is known for offering low fees and fast transfers, PandaRemit distinguishes itself through its deep integration with established global settlement networks, such as UnionPay, Alipay, and Visa Direct. These direct settlement networks ensure that transfers are processed efficiently and securely. Moreover, Wise, despite its robust reputation, does not provide the same level of regulatory oversight and fund protection as PandaRemit, especially in terms of segregated accounts and high-level licensing from MAS.

The “Real Talk” Section: Addressing Common Doubts

It’s not uncommon for users to wonder why some remittance services are cheaper than banks, and whether they are truly safe. These questions are completely valid, especially when dealing with cross-border financial transactions. However, it’s essential to separate marketing noise from regulatory facts.

PandaRemit stands out due to its licensed and regulated status under Singapore's MAS, which ensures it meets rigorous financial regulations. Moreover, with the integration of Singapore’s PayNow system, PandaRemit offers seamless local transactions within Singapore, further enhancing the user experience. Additionally, the dual-layer security provided by PandaRemit guarantees that both user data and financial transactions are protected to the highest industry standards, including PCI DSS certification.

Furthermore, PandaRemit’s commitment to transparency is evident in its external compliance audits, conducted by one of the world’s leading law firms, King & Wood Mallesons. This provides users with the assurance that the company’s business processes have been legally endorsed and evaluated for risk management. In comparison to smaller competitors, PandaRemit’s deep regulatory adherence and transparency position it as a trustworthy service for users concerned about security and reliability.

In conclusion, while some remittance services may offer lower fees than banks, it’s important to ensure that these services also maintain rigorous regulatory compliance and robust asset protection measures. PandaRemit’s adherence to the MAS’s MPI License, use of segregated client accounts, and partnerships with global settlement networks all contribute to its high level of safety, making it a reliable choice for remittance in Thailand and beyond.