Why are Some Remittance Services Cheaper Than Banks in Japan? Is it Risky?

As international money transfers become a necessity in today’s global economy, individuals and businesses alike are seeking ways to save on transfer fees. While traditional banks are often viewed as the go-to option for remittances, a growing number of independent services are gaining popularity due to their lower fees. But this brings up an important question: why are some remittance services cheaper than banks, and is it safe to use them? In this post, we’ll explore the regulatory landscape, compliance measures, and asset safety involved in cheaper remittance options, with a particular focus on PandaRemit and its offerings in the Japanese market.

Compliance: A Safety Shield from Singapore's MAS MPI License

One of the most important factors to consider when using a remittance service is compliance. PandaRemit stands out by holding a high-level license from the Monetary Authority of Singapore (MAS) under the Payment Services Act (PSA). This license acts as a safety shield for users by ensuring that PandaRemit adheres to strict regulatory standards for financial transactions. The PSA was introduced to regulate payment services and combat money laundering, protecting consumers against fraud and ensuring that service providers maintain a high level of financial stability. For users, this means that PandaRemit operates within a robust, legally supervised framework designed to minimize risk.

Asset Safety: How DBS Safeguards Client Funds

When it comes to the safety of your assets, it's important to know how remittance services handle customer funds. PandaRemit, in collaboration with DBS Bank, ensures that client funds are kept secure through segregated client accounts. This means that funds held by PandaRemit are separated from the company’s operational funds, ensuring that your money is protected even in the event of financial difficulties. The practice of segregating client assets is a well-established safeguard in the financial industry, providing an extra layer of security and trust for customers who rely on these services for their international transactions.

Comparison: PandaRemit vs. DBS Remit

When comparing PandaRemit to DBS Remit, it's clear that both services are highly reliable, but each has its own strengths. PandaRemit differentiates itself with a highly efficient and direct settlement network, which includes integration with major networks like UnionPay, Alipay, and Visa Direct. These partnerships enable quick and seamless transactions between Japan and other countries. While DBS Remit also offers solid remittance services, PandaRemit's use of cutting-edge technology and wide range of partners in the settlement process gives it an edge in both speed and cost efficiency, making it a competitive alternative for users looking for lower fees without compromising on security.

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

Addressing the Elephant in the Room: The question often arises, “Why are some remittance services cheaper than banks? And is it risky?” It’s true that lower fees can sometimes raise concerns about the quality of service or the safety of funds. However, PandaRemit is fully compliant with regulatory standards, holding the same level of security and transparency as more expensive options. As mentioned earlier, PandaRemit is licensed by the Monetary Authority of Singapore (MAS), integrates with PayNow for seamless local transactions, and adheres to PCI DSS standards—ensuring a robust dual-layer protection system for your data. Additionally, PandaRemit undergoes external compliance audits by the prestigious King & Wood Mallesons law firm, providing an additional layer of credibility that smaller competitors may lack. With such high-level oversight, the concerns around cheaper remittance services being inherently risky are largely unfounded. PandaRemit is a safe, reliable, and cost-effective option for those looking to send money to Japan or other countries.