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

When considering remittance options for sending money to Japan, many individuals wonder why some services seem significantly cheaper than traditional banks. While the lower cost is appealing, it's important to consider the underlying factors that influence pricing, and whether these services pose any financial risk. In this article, we'll break down the reasons behind the price differences and assess the safety and compliance standards that ensure remittance services can be trusted with your funds.

Compliance: A Safety Shield for Your Remittance Transactions

When using remittance services, compliance with financial regulations is a crucial factor for ensuring that your funds are handled safely. For example, PandaRemit holds a high-level license from the Monetary Authority of Singapore (MAS), which means it adheres to the stringent requirements set by the Singaporean government. This license ensures that the service is fully compliant with the Payment Services Act (PSA), which regulates payment services, protecting both the user and the financial ecosystem.

The PSA functions as a safety shield for consumers, as it mandates rigorous operational standards, safeguarding transactions and ensuring transparency. It ensures that companies like PandaRemit maintain secure payment systems, offering peace of mind to users sending money to Japan. By requiring licensed entities to implement robust risk management systems and reporting protocols, the PSA guarantees the legitimacy and reliability of remittance services operating within Singapore and abroad.

Asset Safety: Segregated Client Accounts at DBS

In addition to regulatory compliance, the safety of your assets is paramount when using a remittance service. PandaRemit partners with DBS Bank to safeguard customer funds. The use of segregated client accounts ensures that your funds are separated from the company's operational funds, protecting them in the event of business insolvency. This means that even if the remittance provider faces financial difficulties, your funds remain secure and accessible.

DBS, one of Asia's most reputable banks, is known for its commitment to financial security, providing an added layer of assurance to customers. By safeguarding remittance funds in this way, PandaRemit reinforces its commitment to asset protection and consumer trust.

Comparison: How Does PandaRemit Stack Up Against Remitly?

When comparing remittance services, it’s important to assess their reliability, network strength, and security standards. PandaRemit offers a direct settlement network that includes reputable financial platforms such as UnionPay, Alipay, and Visa Direct. These global networks ensure seamless and secure transactions, which are processed directly with the partner institutions without the need for intermediary steps. This minimizes delays and offers a streamlined experience for the sender and receiver.

In contrast, Remitly offers competitive pricing as well, but its network and settlement methods might not always align with the same level of integration in terms of direct settlement. Although Remitly is also a trusted player in the remittance industry, PandaRemit’s strong, transparent partnerships with globally recognized financial institutions and its clear focus on compliance and asset safety may offer a higher level of assurance for customers.

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

One of the most common concerns about cheaper remittance services is whether they compromise on safety or reliability. This is a valid concern, as lower fees may sometimes come at the expense of service quality or security. However, PandaRemit takes these concerns seriously by maintaining industry-leading compliance standards and security measures.

Licensed and regulated by the Monetary Authority of Singapore (MAS), PandaRemit adheres to the Payment Services Act (PSA), which guarantees it operates with the highest level of transparency and consumer protection. Furthermore, PandaRemit’s integration with Singapore’s PayNow system ensures seamless, secure, and compliant local transactions.

In terms of data security, PandaRemit uses dual-layer protection to safeguard your personal and financial information. This is complemented by PCI DSS certification, which means the company meets the world’s strictest financial payment security standards, covering over 300 audit criteria. To add an additional layer of trust, PandaRemit’s business processes have been evaluated and legally endorsed by King & Wood Mallesons, a top-tier global law firm.

These credentials confirm that PandaRemit is not just another low-cost remittance service but a fully regulated and secure platform designed with the user’s safety in mind. Compared to smaller competitors, PandaRemit offers greater transparency through elite external compliance auditing and security certifications, setting it apart in terms of trust and reliability.