We know that money transfer services like Ria Money Transfer are highly specialized nowadays. While some operators offer you the fastest way to send money, others claim to be the safest, and still others provide the cheapest way to expedite your international transfers. There is further differentiation when sending large transfers versus sending frequent small amounts. In such an environment of super specialization can there actually be one best way? Let’s uncover the answer to this question in light of all the various ways available to us today to send money back home to Colombia.
Colombia received $6.3 billion in remittances during 2018. Nearly 82% of these originated in the US and Spain. More than a hundred operators offer remittance services from the US to Colombia. There is a wide variance across these service providers in the cost of sending a remittance. A sender must pay between 3% and 13% of the total remittance value in transfer fees and exchange rate margins. Brick and mortar businesses and conventional banks consistently cost more than online transfer services. The high cost of remittances is an issue worldwide, and has been a factor in limiting the growth in the volume of remittances. It is rather ironic that developing nations, which need remittances most, are the ones who must pay the highest costs for moving money. This is a matter which continues to receive much international attention.
The average size of a remittance transfer to Colombia is just under $300. The average Colombian expat sends remittances roughly 7.5 times every year. The dominance of frequent small transfers indicates that these are primarily meant for family support and recurring expenses. For such purposes speed is usually of secondary importance to cost-effectiveness. Compared across remittance service providers, there is again a wide variation in speed. The time taken for remittances to travel from the US to Colombia ranges from a few minutes to a few days. Purely internet-based services and account-to-account transfers are consistently the fastest. As expected, brick and mortar businesses and services which offer cash collection at the recipient end are the slowest. Some operators more than compensate for the sluggishness with value addition through their additional services.
The Colombian Central Bank reports that only about a third of all remittances flowing into the country are received directly into bank accounts. This figure has shown a slow growth during past years. It is subject to several variables including access to conventional and electronic banking. Nevertheless, there is no marked difference in safety standards across the various remittance service providers. Conventional banks were traditionally considered the safest. However, this has changed. All service providers exist in the same regulatory environment. Even so, there are variations in customers’ perception of security. There is an increasing preference for web-based services that can offer real-time end-to-end tracking of transfers. Such services are able to also provide automatic and immediate reversal in case of rare failures, with the money being credited back to the sender’s account within minutes.
It is evident that we cannot characterize any single service as being the ‘best’ for all situations. When sending remittances from the US to Colombia, each operator aims to satisfy the needs of a certain segment of the customer base. Yet, with everyone using similar technology and infrastructure, differentiation in speed, cost and security diminishes. Other than notably inefficient, expensive or slow services (such as brick and mortar banks) all operators offer almost identical solutions. In this environment one overarching aspect to win customers over is convenience. One case in point is Ria Money Transfer, an international money transfer service provider, which serves customers in 144 countries through more than 314,000 locations worldwide. You can walk into a Ria Money Transfer office in the US and send money to Colombia with ease. Your beneficiary does not need to have a bank account, a computer/smartphone, or internet access. The money you send can be collected in cash by your recipient from another brick and mortar office, or a cash collection point in Mexico. All of these options exist in addition to Ria Money Transfer’s purely web-based transfer service, as well as Ria Money Transfer’s mobile app which you can use to send money anytime and from anywhere.
About the Author
Tricia Lee is a contributing writer at Sparkwebs LLC, a Digital and Content Marketing Agency. When she’s not writing, she loves to travel, dance and read books.