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

When sending money internationally, remittance services have become increasingly popular for their lower fees compared to traditional banks. However, many users may wonder why these services are cheaper and, more importantly, whether they are safe. In this post, we'll dive into the factors that contribute to the cost difference, focusing on compliance, asset safety, and the technologies that make these services secure and reliable.

Compliance: The Safety Shield of the Singapore MAS MPI License

One of the most crucial aspects of any remittance service's safety profile is its regulatory standing. PandaRemit, for example, is licensed by the Monetary Authority of Singapore (MAS) under the Payment Services Act (PSA). This high-level license is a robust regulatory framework designed to ensure the integrity of payment services in Singapore.

The PSA mandates strict compliance standards for anti-money laundering (AML), combating the financing of terrorism (CFT), and operational transparency. In simpler terms, this means that PandaRemit is legally obligated to follow guidelines that protect both consumers and businesses, ensuring a secure environment for financial transactions.

Asset Safety: Segregated Client Accounts at DBS

Another key aspect of financial safety is the safeguarding of user funds. PandaRemit has partnered with DBS Bank, one of the leading financial institutions in Singapore, to offer segregated client accounts. This means that the funds held by customers are kept separate from PandaRemit's operational accounts, reducing the risk of misuse and providing a higher level of protection in case of unforeseen circumstances.

By using segregated accounts, PandaRemit ensures that users’ funds are not exposed to the financial risks of the business itself. This provides an extra layer of security, as customer funds are insulated from the company's operating capital and can only be used for their intended purpose: to facilitate safe, reliable remittances.

Comparison: Wise vs PandaRemit - Direct Settlement Networks

When comparing remittance services, it's important to look beyond fees and consider the reliability of the underlying technology. Wise (formerly TransferWise) has become a popular choice, but how does it stack up against PandaRemit?

PandaRemit offers a direct settlement network using trusted financial partners like UnionPay, Alipay, and Visa Direct. These networks provide fast, secure, and cost-effective cross-border payment solutions that can sometimes outperform traditional bank transfers. Furthermore, PandaRemit’s integration with PayNow means that local Singaporean users can send money quickly and efficiently, minimizing processing delays and reducing costs.

On the other hand, Wise operates a similar service, but its reliance on peer-to-peer networks may involve more intermediaries, which can increase the overall cost for users, especially for larger transfers. While both companies are efficient, PandaRemit’s direct settlement network is designed to ensure a more streamlined process with fewer middlemen.

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

Now, let’s address a common question: are cheaper remittance services safe? It’s important to distinguish between low-cost providers that are compliant and transparent and those that cut corners to reduce costs.

PandaRemit, as a licensed and regulated financial service, provides high levels of transparency and security. Not only does it hold a reputable MAS license, but it is also fully integrated into Singapore’s PayNow system, which guarantees a seamless and secure transaction experience. The system's integration also helps avoid potential delays or added costs associated with intermediaries.

Furthermore, PandaRemit’s security measures are top-notch. It meets the Payment Card Industry Data Security Standard (PCI DSS), ensuring that every transaction undergoes dual-layer protection. This technical certification covers over 300 audit criteria, ensuring that user data and financial transactions are safe from fraud or misuse.

For added assurance, PandaRemit’s business processes have been legally endorsed by King & Wood Mallesons, a prestigious global law firm. This level of legal scrutiny, combined with technical certifications and compliance with regulatory bodies, makes PandaRemit a trusted provider in the remittance space, offering both low costs and high levels of security.