Remittance is money sent home by people living abroad to enhance the financial condition of their families and loved ones. Over the years, remittance has become an integral part of the economies of nations like Nigeria. The economy of countries like Nigeria is, to a considerable extent, impacted by remittance.
In recent years, remitters (i.e., people who send money to Nigeria from other countries) have increasingly relied on modern remittance services, including International Money Transfer Operators (IMTOs) rather than the traditional ways of remittance for dispatching cash to their loved ones back in their home country.
Traditional Methods of Remittance
Traditional money transfer methods include bank cheque transfers, money transfer agents, demand drafts, and money orders. Since most recipients were not exposed to or used to modern remittance methods, remitters used the traditional methods of remittance, which made them go through a lot of problems sending money. Some of the challenges the remitters encounter using traditional remittances include high transfer costs. The transfer fees accounted for over 10% of the money they tried to send to their loved ones at home. The money also took a long time to get to their loved ones. Sometimes it took weeks for the money to get to its destination. These delays resulted in a desperate need for a new remittance method.
Modern Money Transfer System (i.e., Using IMTOs)
Initially, people thought that online transfer systems would be a complicated process—requiring some sophisticated gadgets, so they initially resisted these modern transfer systems. There were also issues of the remitters not trusting the online remittance operators or remittance providers. Still, since people were helpless and the traditional remittance system was very inconvenient and brought about so many issues, they had to give the IMTOs a try. With time the remitters started getting familiar and confident with the new transfer system, and today it is trendy among remitters.
Why Online IMTOs Are Better
For those living in the diaspora, online remittance and the use of IMTOs have proved to be a blessing for them because it has proffered solutions to the problems created by traditional remittance method. The list below summarizes some of the problems solved by online transfer. They include:
- Transfer time: The time taken to send money using online transfers is significantly reduced. With the modern methods, i.e., online transfer or using IMTOs, a person can complete remittance in barely 10 minutes instead of the weeks it takes for the traditional transfer methods.
- Flexible Payment methods: Using IMTOs, remittance can be done via credit cards, bank account, and debit cards, depending on the remitter’s choice. This versatility was not obtainable in the traditional method, and this brings comfort and convenience.
- Transfer fee: IMTOs like MoneyTO are known to provide free to meagre transfer fees. In online transfers, there are no extra charges; one only needs an internet connection. MoneyTO provides the least possible transfer fee rates.
- Multiple Currency Exchange: The traditional remittance required going to the local exchange shops to change the money to the currency you want to send before sending it. With the advent of online money transfer services and the availability of IMTOs, remitters can send money to their loved ones in any currency from the comfort of their homes.
- Security of money: The online transfer services allow you to transfer money more securely, utilizing sophisticated data encryption systems than the traditional money transfer methods. The IMTOs keep you updated on the status of your transfer.
- Simple transfer process: The remitters had to go to the bank while using traditional remittances, stand on long queues and fill out lengthy questionnaires. But with the modern online method, you can make transfers from the comfort of your home within no time, using simple, user-friendly procedures.
Online remittance has become popular among remitters because of its efficiency, speed, reliability, safety, and transparency. The IMTOs keep the remitters updated on the status of their transaction via emails and SMS. Anyone using a traditional remittance method will have to wait for up to two or three weeks before the recipient receives the money because several financial institutions have different procedures and regulations that they have to follow to complete remittance. The only benefits of the traditional remittance services, which are far outweighed by the disadvantages, are that one can send funds to very remote areas with no internet services.