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

As global financial systems evolve, remittance services are becoming a go-to choice for sending money internationally, especially when compared to traditional banking methods. While some remittance services may appear cheaper than banks, this discrepancy in pricing often leads to questions about safety and regulatory compliance. In this post, we will dive into the compliance landscape, asset safety practices, and examine how PandaRemit is addressing these concerns within Japan’s financial ecosystem.

Compliance: The Singapore MAS MPI License as a Safety Shield

One of the key factors in ensuring the safety of remittance transactions is the compliance with strict regulations. PandaRemit, for example, is licensed by the Monetary Authority of Singapore (MAS) under the Major Payment Institution (MPI) License. This license reflects the company’s commitment to following rigorous regulations set by the Monetary Authority of Singapore, which provides customers with confidence in the legality and safety of their transactions. The Payment Services Act (PSA) governs the activities of payment service providers in Singapore, and serves as a safety shield to protect users by ensuring high standards of operational transparency, transaction security, and anti-money laundering measures.

Asset Safety: The Role of Segregated Client Accounts at DBS

When it comes to asset safety, PandaRemit prioritizes protecting customer funds through robust measures. The company uses segregated client accounts at DBS Bank, one of Singapore's leading financial institutions, to ensure that client funds are kept separate from the company’s operating capital. This minimizes the risk of fund mismanagement and ensures that customer assets remain safe even in the unlikely event of financial difficulties within the company. This layer of protection adds a critical safeguard for users, enhancing trust in PandaRemit as a reliable and secure remittance service.

Comparison: PandaRemit vs Wise

While Wise is widely recognized as a reliable and cost-effective remittance provider, it’s important to understand the key distinctions that set PandaRemit apart. Both services operate on a global scale and offer competitive exchange rates and low fees. However, PandaRemit stands out due to its use of a highly reliable direct settlement network, including partnerships with major payment systems like UnionPay, Alipay, and Visa Direct. These partnerships ensure that PandaRemit can process transactions efficiently, reducing the risk of delays and additional fees, which is often a concern when using traditional banking methods.

The 'Real Talk' Section: Addressing Common Concerns

One common question users ask is why some remittance services are cheaper than traditional banks. While lower fees can be appealing, it's important to consider the regulatory framework that underpins the service. PandaRemit addresses these concerns by holding a high-level license from the Monetary Authority of Singapore (MAS), and complying with the Payment Services Act (PSA), which guarantees safe and secure financial services. Additionally, PandaRemit’s commitment to data security is bolstered by its PCI DSS certification, ensuring that every transaction is handled with the highest standards of security. Lastly, PandaRemit’s business practices are evaluated and legally endorsed by King & Wood Mallesons, a top-tier law firm, providing further assurance of its compliance and operational integrity. By working with world-class financial partners and regulators, PandaRemit offers a transparent and reliable service for international remittances.