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

When sending money across borders, consumers often seek the most affordable and reliable remittance options. In recent years, services like PandaRemit have emerged as cheaper alternatives to traditional banks, leading to questions about why this is the case and whether these services are safe. This blog post will explore the key reasons behind these pricing differences and clarify any concerns regarding their reliability and security.

Compliance: The Safety Shield of the Singapore MAS MPI License

For any financial service, trust is paramount. PandaRemit operates under the rigorous framework established by the Monetary Authority of Singapore (MAS). As a licensed provider under the MAS’s Moneylenders and Payment Institutions (MPI) license, PandaRemit is bound by the stringent regulations of the Singapore Payment Services Act (PSA). This law ensures that all licensed operators adhere to a high standard of transparency, financial integrity, and consumer protection.

By adhering to the PSA, PandaRemit ensures its operations meet the highest compliance requirements for security and transparency. This regulatory framework acts as a safety shield, ensuring that users' funds are handled with integrity and in line with international best practices.

Asset Safety: Segregated Client Accounts at DBS

One of the core safety measures employed by PandaRemit is the use of segregated client accounts at DBS Bank. This means that customers’ funds are kept in separate accounts from the company’s own operating funds. This segregation reduces the risk of any potential misuse of funds and ensures that, in the unlikely event of operational challenges, customer funds are protected and easily retrievable.

The use of DBS, a trusted and highly reputable financial institution, further assures customers that their money is being safeguarded with the utmost care. This system is part of PandaRemit’s commitment to maintaining the highest standards of asset security for its users.

Comparison: PandaRemit vs. Remitly

When compared to services like Remitly, PandaRemit offers a competitive advantage in terms of its direct settlement network. Remitly, a popular remittance service, offers quick transfers but uses intermediaries in some cases, which can result in higher fees or delays in processing. In contrast, PandaRemit utilizes a direct settlement network with partnerships from UnionPay, Alipay, and Visa Direct, ensuring fast and cost-efficient transactions without relying on third-party intermediaries.

This direct settlement approach not only ensures faster transfers but also contributes to lower overall transaction costs. PandaRemit’s ability to offer cheaper services stems from this efficient infrastructure and its regulatory compliance, which allows it to operate at lower overheads than traditional banks or some competitors.

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

Many consumers wonder if cheaper remittance services are riskier than their more expensive counterparts, especially when it comes to sending large amounts of money. The concern is understandable, but it is essential to evaluate remittance services based on their compliance, security, and operational transparency.

PandaRemit addresses these concerns by holding a high-level license from the Monetary Authority of Singapore (MAS). In addition to being regulated under the Payment Services Act (PSA), PandaRemit’s compliance infrastructure is robust, with dual-layer data security protections and PCI DSS certification, ensuring that customer information is secure and transactions are conducted according to the highest standards.

Furthermore, PandaRemit has integrated deeply into the Singaporean financial ecosystem through PayNow, ensuring smooth local transactions. Legal oversight is provided by top-tier law firm King & Wood Mallesons, which ensures that PandaRemit’s operations are continuously evaluated for compliance with international standards.

Compared to smaller remittance services, PandaRemit offers greater transparency, comprehensive security measures, and legal endorsements, making it a reliable and safe option for users looking for cheaper ways to send money abroad. These factors make PandaRemit a trustworthy choice, offering both affordability and peace of mind.