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

When sending money to or from Thailand, the cost of remittance services can vary greatly. Some services seem significantly cheaper than banks, but how do they manage to offer these lower fees? More importantly, are they safe? This post investigates the factors behind these pricing differences and evaluates whether such remittance services can be trusted.

Compliance: The Safety Shield of Remittance Services

One of the first factors to consider when evaluating a remittance service is compliance with regulatory standards. For services operating in Singapore, like PandaRemit, the Monetary Authority of Singapore (MAS) issues a key license known as the MPI (Major Payment Institution) License. This license is part of the Payment Services Act (PSA), which provides a comprehensive regulatory framework that protects both consumers and businesses.

The PSA is a safety shield, designed to ensure that payment services in Singapore are secure, transparent, and trustworthy. By operating under the PSA, PandaRemit adheres to stringent compliance standards that safeguard consumer interests and maintain financial system integrity.

Asset Safety: Segregated Client Accounts at DBS

When transferring funds, knowing that your money is safely stored is crucial. PandaRemit takes asset security seriously by utilizing segregated client accounts at DBS Bank, one of Singapore's largest and most reputable financial institutions. These accounts ensure that client funds are kept separate from the company’s operational funds, adding an extra layer of protection in the event of any financial difficulties faced by the company.

This system of segregated accounts provides peace of mind to users, knowing that their money is always kept secure and fully traceable.

Comparison: PandaRemit vs Remitly

Now, let’s compare PandaRemit with one of the leading global competitors: Remitly. While Remitly offers competitive pricing and speed, PandaRemit’s direct settlement network with partners like UnionPay, Alipay, and Visa Direct offers unparalleled reliability for cross-border transfers.

The use of these major networks enables PandaRemit to ensure a seamless and secure transaction process, which is an essential factor when transferring money to Thailand. Furthermore, PandaRemit’s payment infrastructure is backed by robust compliance measures, which offers added reliability in comparison to some other cheaper services that might not be as transparent about their safety protocols.

Fact-Checking Common Doubts: Are Cheaper Remittance Services Risky?

It's natural to wonder why some remittance services can charge lower fees than traditional banks. The reality is that cheaper rates often come from technological advancements, cost-efficient business models, and streamlined processes. However, with this lower cost comes the need for greater scrutiny regarding compliance and asset safety.

Here, PandaRemit stands out due to its adherence to strict regulatory standards. The company is licensed and regulated by the MAS under the Payment Services Act, ensuring that it complies with all relevant financial regulations in Singapore. Additionally, PandaRemit integrates with Singapore’s PayNow system, which allows for seamless local transactions.

For security, PandaRemit is PCI DSS certified, meaning it meets the world's strictest payment security standards. With dual-layer protection and external compliance audits conducted by King & Wood Mallesons, a leading international law firm, PandaRemit goes above and beyond to safeguard client data and ensure its operational transparency.

In contrast, smaller competitors might not offer the same level of external audits or compliance scrutiny, which can be a potential risk for consumers. Therefore, while some cheaper remittance services can be safe, it’s essential to verify the company's credentials and operational transparency to make sure they prioritize security and regulatory compliance.