Where Does the Global Remittance Industry Stand?
The need to transfer funds across borders has risen considerably over the last few decades. Scores of businesses pay suppliers and employees from other countries and several receive payments from international customers. Migrants require the services of the remittance industry on an ongoing basis, and their numbers continue to swell. Fortunately, advancements in technology have ensured that making international fund transfers is no longer expensive, time consuming, or bothersome.
The global remittance industry has come long way since the ninth century, when Chinese traders used ‘flying money’ in the form of paper vouchers as proofs of payment, which served as a means to safeguard themselves from thieves. It was only when the industrial age had set in that international money transfers took a completely new form. Wire transfers entered the picture in the late 19th century, and its popularity resulted in the birth of several private non-banking companies that offered this service. Some of the pioneers of this field, such as Western Union, remain in existence even today.
While wire transfers were common in the late 19th and early 20th centuries, the use of mail remained the primary mode of communication even until the early 1990s. By this time, international money orders started finding an increasing number of takers, and they soon became one of the most commonly used way to transfer funds internationally. In the mid-1990s, money orders accounted for around 40% of remittances sent to Mexico. Low costs worked in the favor of international money orders, although the time taken for funds to reach recipients depended on multiple factors.
The biggest changes have taken place around the turn of the last century. The use of electronic transfers has increased manifold, and this medium now accounts for over 90% of all cross-border remittances. A recipient can receive cash from a physical location moments after a sender initiates a transfer. Alternatively, funds can move between bank accounts held in different countries with relatively ease, without actually dealing with a bank.
The future looks better still, where a society is embracing going cashless. With the advent of virtual crypto-currency platforms such as Bitcoin, Ethereum, and Litecoin, moving funds from one country to another may get easier than ever before.
Banks – International Telegraphic Transfers and Wire Transfers
The terms wire transfers and telegraphic transfers are often used interchangeably. However, a telegraphic transfer, historically, relies on a cable message being sent from one bank to another in order to facilitate a fund transfer. A telegraphic transfer, or a telex transfer, usually involves a fee charged by the sending bank, and in some instances, by the receiving bank as well.
A wire transfer involves the transfer of funds electronically, and you may carry out a wire transfer through your bank. Financial institutions might depend on different transfer systems and offer multiple options when it comes to aspects such as costing and turnaround times. For example, centralized bank wire transfers in the U.S. typically rely on real time gross settlement (RTGS) systems that offer real-time and irrevocable settlements.
Banks have lost out on their share of the global remittance pie over the last couple of decades mainly because of cost-effectiveness, although the time they typically take to process transfers has also played a role. The competition they face from their non-banking counterparts, without doubt, is stiff.
Specialist Money Transfer Companies
Western Union launched its wire transfer service in 1872, by making use of its then existing telegraph network. Now, the company has storefronts in several countries, giving people easy means to send and receive money in different ways. Some of the other popular players with physical locations or agents include WorldRemit, MoneyGram, Azimo, and Ria. While the wire transfer services offered by such companies are largely similar to what you’ll find through banks, they tend to offer quicker turnaround times by charging extra fees.
The online space, owing to fewer overhead costs and rapidly evolving technology, has sprung a number of FinTech companies such as TransferWise and CurrencyFair. TransferWise, a UK-based FinTech unicorn, for instance, has successfully driven down industry costs by offering game changing services such as low-fee multi-currency accounts.
Low Tech Remittance Across Exotic Currencies Using Second Generation Mobile Phones
Residents of several countries in Asia, Africa, and South America continue using second generation mobile phones. This presents a unique opportunity not just for businesses that deal in remittance of funds, but also for mobile phone network providers. Digicel, owned by the Irish billionaire Denis O’Brien, currently operates in 31 markets across Central America, the Caribbean, and Oceania. With around 14 million customers, it is already making inroads in the mobile banking and micro insurance sectors. O’Brien has, in the past, made clear that he hopes to leverage his mobile brand to facilitate cash transfers.
The Future – Crypto Currency Remittance
There has been a rise in the use of crypto currency as a medium for global remittance, and the upward trend is set to continue. Catherine Wood, CEO of ARK Investment Management in the US, opines that “The liquidity isn’t there, but as we gain liquidity in bitcoin, the costs will drop dramatically and be minimized. As a digital ledger, blockchain is fully transparent. There is an audit trail. We are eliminating a lot of middlemen here. FinTech will be more of an answer to the problem of fraud than a cause of it.”
However, not everybody is equally optimistic. Taavet Hinrikus, CEO of UK-based TransferWise, feels “There is a fundamental problem. It is lacking a purpose and is pure speculation. I cannot really see a problem that bitcoin is solving.” His view of the overall blockchain technology is more positive, about which he says, “I see things coming to life which are built around blockchain but not digital currencies.”
For now, it looks like depth of market may impact the ability of exchanges to convert in and out of local exchanges in different global regions. As a result, crypto currencies may not be appropriate for some of the more exotic currencies yet.
The developing FinTech sector will, without doubt, define the future course of the remittance industry. With consumers becoming increasingly aware of the options they have, the industry will need to keep evolving so it can provide services that match the needs of its customers. The way money is transferred across borders has witnessed a sea of change in the last two decades, and by the looks of things with new multi-currency accounts, better things are yet to come.
Brick By Brick, BRICS Now a New Bridge for a New World
Measuring BRICS in single decades, in 2001, BRIC started as an acronym for Brazil, Russia, India, and China; Goldman Sachs economist Jim O’Neill claimed that by 2050 the four BRIC economies would come to dominate the global economy. So South Africa was added to BRIC in 2010. The following countries are now expressing interest in joining: Afghanistan, Algeria, Argentina, Bahrain, Bangladesh, Belarus, Egypt, Indonesia, Iran, Kazakhstan, Mexico, Nicaragua, Nigeria, Pakistan, Saudi Arabia, Senegal, Sudan, Syria, the United Arab Emirates, Thailand, Tunisia, Turkey, Uruguay, Venezuela, and Zimbabwe. Is this now the awakening of BRICS+ or BRICS power?
BRICS+ by 2030 will add dozen new members and carve new indices, and by 2040, it will lead to new intellectualism on geopolitics and socio-economies for the super complex 2050 age of smart living.
Historically, BRICS nations pushed on their people-power agenda over super-power titles. They made extreme value-creation economic models over focusing on powerful military-industrial complexes. They focused on nation-building and avoided special mandates to manage global affairs. They have been on a quest to upgrade them. They were feeding hungry mouths, as they were population rich, constantly up-skilling, and improving value creation as they were SME rich. They kept a steady watch to create multilateralism to uplift humankind.
They, too, made mistakes, as did the rest of the world
In the third decade of the third millennium, come 2020, three transformations erupted. First, futurism changed the rules on the ‘physicality of work’ and created a new imbalance with the ‘mentality of performance’; this has divided the workforce of world; the old system of over a billion commuting daily to the center of a complex maze to arrive daily at the sanctum of the company and create climate change. So now, in response, some 50% of the world’s workforce has chosen to stay away and work remotely in the surroundings of wide-open choices. Furthermore, technology uplifted micro-power-nations and exposed Western economies now stripped naked in bubble baths on slippery floors, they tippy-toe practicing conga-lines
Newly magnified economy: Behold, what microscopes exposed the magnified inner workings of the body. Similarly, the integrated networks have exposed the digital connectivity and working of millions of villages, cities, and nations with additional billions of people to interact, trade, improve grassroots prosperity and create a well-informed and opinionated citizenry. Some 100 years ago, if only 1% of the world’s population knew what was happening, today it is a dozen times more, and by 2030 double again. Why would these numbers change the global economic matrix when translated into micro-trading, micro-manufacturing, and micro-exporting? International opinion today is already strong enough to crush any national opinion of any nation still lingering under the illusion of a self-promoted victory.
When the SME sector already exists within each nation, the global markets are always hungry for good quality goods and services, and the rains of almost free digital technologies make such transformation a quick turnaround. Therefore, mindsets are critically essential; the need to define the difference between the job seeker mindset that builds the organizations and the job creator mindset that originates and creates that organization in the first place.
So what are the lessons, key features, and blueprints in sight?
Mistakes and new lessons: Last many decades, as the new world was rising, Western citizens felt like China experts, and their regular visits to local China towns restaurants in each city misguided them that Laundromat trained Chinese could only produce some chicken fried rice. Ever since the advent of the camera, the East was always projected as poor and dysfunctional; mesmerized by the media coverage during the last many decades, the West was equally convinced that India, a land of only snake charmers and fakirs, finally someday speak better English. The general perceptions about Asia, besides eating rice, if they could ever make cheaper products for the West. The rest is history, mistakes, and lessons.
After the big ding-dong nights of 2000 New Year’s Eve, today’s new story starts from the 20th chapter. Now China and India alone have created some 500 million new entrepreneurs, not by a magic pill or meta-crypto-wand but by National Mobilization of Entrepreneurialism, a slow, painful deployment of SMEs across the nation, and by creating mobilization protocols to identify, classify, and digitizing based on multiple factors from type and size to the evaluation of their “respectable” role in future communities and economic factors. This methodology was far more advanced in strategy and stern management over the globalization frenzy from the West, where sudden exporting of manufacturing of the industrial plants to kill manufacturing and destroying the middle class out of the West already declared globalization a great success.
The other mistake is to assume this is an economic or an academic study, at best, like an Oscar Slap on sleepy rotundas occupied with endless printing of money across the Western economies. Instead, this is an entrepreneurial response for the entrepreneurial nations to awaken hidden entrepreneurial talents in up-skilling SMEs and re-skilling manufacturers at national levels.
Recommendations and warnings: No airline can survive with only Flight Engineers and Frequent Flyers stuffed inside the cockpits; that space is only reserved for highly trained pilots. Henceforth, across the world, any economic development of any size, shape, or authority may find other more suitable alternate paths of occupation if they still cannot demonstrate any levels of understanding, applicable skills, or mobilization mastery on the National Mobilization of Entrepreneurialism to up-skill exporters and re-skill manufactures and uplift national SME sector as the most prominent economic contributor of the nation. Study the biggest error of economic thinking
Underestimating the hidden powers of early thinking and starting a tiny unknown SME is a mistake of mindsets; here, entrepreneurialism like a saga unfolds, like a voluminous piece of literature but demanding literacy, understanding the job seeker mindsets and the ability to differentiate with entrepreneurial job creator mindset is already winning half the battle. Study the Mindset Hypotheses
Nations failing to realize the power of the billion SME rising in Asia and still unable to declare a national agenda of national mobilization of SMEs now must acquire an understanding of the 4B Factor: a billion displaced due to the pandemic, a billion replaced due to technology, a billion misplaced in wrong jobs now a billion on starvation watch. Furthermore, this 4 billion ever digitally connected mass of people ever in the history of humankind is now the most significant force of global opinion. Notice nations are already intoxicated with joy over the popularity of their national public opinion while having just an opposite international opinion on the world stage.
Recommendation; everyone is born an entrepreneur; our system chips away at this talent. Nevertheless, 10% to 50% high potential SMEs of any nation once are identified, classified, and digitized within 100 days. The uplifting digital platforms of up-skilling exporters and re-skilling manufacturers will result in 10% to 50% quadrupling their performance, productivity, and profitability. Imagine how much-regimented efforts will activate a positive national economic revolution based on real value creation, uplifting grassroots prosperity. How soon is a nation ready for a significant change? The rest is easy.
Promoting Economic Security: Enhancing Stability and Well-being
The stability and well-being of people, communities, and countries are critically dependent on economic security. It covers a range of topics, such as access to necessities, work opportunities, stable incomes, and defense against economic shocks. The need of guaranteeing economic security has increased significantly in the modern world, which is characterized by technical developments, geopolitical shifts, and unexpected disasters. The importance of economic security is examined in this article, along with important tactics for promoting adaptability and preserving people’s quality of life.
The value of economic security to individuals, communities, and countries cannot be overstated. By fostering an atmosphere where people and families can achieve their basic needs without suffering undue stress, it promotes stability. Because of this stability, people can recuperate and start over after severe shocks like economic downturns, natural disasters, or health crises.
Furthermore, economic security contributes to social cohesion by reducing inequality and fostering inclusivity. When individuals feel economically secure, they are more likely to actively participate in society, contribute to their communities, and engage in productive endeavors. This sense of security leads to greater social harmony and a collective feeling of prosperity.
Moreover, economic security is vital for long-term sustainable development. It enables individuals and societies to invest in education, healthcare, infrastructure, and innovation. These investments drive economic growth, improve overall well-being, and create the foundation for a prosperous future. By ensuring economic security, countries can build resilient and sustainable economies that benefit their citizens and contribute to global progress.
To enhance economic security, several key strategies can be implemented. Firstly, governments and businesses should prioritize diversifying their economies by promoting sectors with growth potential and resilience. By reducing reliance on a single industry or market, countries can mitigate the impact of economic downturns and build a more robust and diversified economy.
Investing in education and skills development is another crucial strategy. Governments and organizations must focus on providing quality education, vocational training, and lifelong learning opportunities. Equipping individuals with the necessary tools and knowledge enables them to adapt to changing economic landscapes and remain competitive in the job market.
Strong social safety nets are necessary to protect people during times of economic upheaval. The most disadvantaged populations should be given priority in the design and implementation of comprehensive social welfare systems by the government. Creating a safety net for all citizens entails implementing programs for income support, healthcare coverage, and unemployment benefits.
Promoting entrepreneurship and innovation can create new opportunities for economic growth and job creation. Governments can support aspiring entrepreneurs by providing access to capital, mentorship programs, and favorable regulatory environments. Embracing technological advancements and fostering a culture of innovation further enhances economic security, particularly in an increasingly digital world.
International cooperation is essential since economic security is a global issue. Cooperation between nations is necessary to advance ethical business practices, lessen economic inequality, and improve financial stability. Initiating discourse, coordinating policy, and assisting nations in economic crises are all important functions of multilateral organizations.
Societies can improve their economic security and create a more secure and prosperous future by putting these strategies into practice: diversifying the economy, investing in education and skills, creating social safety nets, encouraging entrepreneurship and innovation, and fostering international cooperation.
Having economic security is crucial in a world that is uncertain and changing quickly. Governments, corporations, and individuals may all work together to create an environment that promotes economic security by putting a priority on stability, resilience, and inclusivity. We can create a more resilient and prosperous future for everybody through diversity, education, social safety nets, entrepreneurship, and international cooperation. By making investments in financial stability, we build a more just and sustainable world.
The Impact of Globalization on the South Asian Economy
Globalization refers to the process by which economies, societies, and cultures from different countries become integrated with one another. The economies of the countries that make up South-East Asia, which include India, Pakistan, Bangladesh, Nepal, and Sri Lanka, have been significantly impacted by the spread of globalization in recent decades. The effects of globalization on the economies of South Asian countries have been mixed, with some positive and some negative results.
Positive Impacts of Globalization on the South Asian Economy
The expansion of South-East Asia’s trade and investment opportunities is one of the aspects of globalization that has had the most positive impact on the region’s economy. Because of its large consumer base, low labor costs, and strategic location, the region has become an attractive destination for foreign investors. As a consequence of this, the level of foreign direct investment (FDI) in South Asia has significantly increased, which has led to the development of new industries and the production of new jobs.
The expansion of the service industry in Sout-East Asia can also be attributed to the effects of globalization. South Asian countries have emerged as a hub for the outsourcing of services such as information technology (IT) and business process outsourcing as a result of the emergence of new technologies and the increased availability of skilled labor (BPO). As a direct consequence of this, the area has benefited from an increase in both the number of available jobs and the amount of money it brings.
Last but not least, globalization has facilitated greater cultural interaction and integration throughout South-East Asia. The region possesses a significant cultural legacy, and the advent of globalization has made it possible for South Asian music, films, and cuisine to become popular all over the world. This has not only contributed to a greater awareness of the region’s cultural heritage, but it has also opened up new doors for the travel and hospitality industry.
Negative Impacts of Globalization on the South-East Asian Economy
Even though there have been some positive effects, there have also been some negative effects that globalization has had on the South Asian economy. The widening gap between rich and poor is one of the most pressing problems that we face today. The advantages brought about by globalization have accrued almost entirely to a relatively small number of people, which has contributed to a widening income gap. As a consequence of this, social unrest and a wider gap in incomes have emerged.
Another significant obstacle that has been presented is the displacement of workers and traditional industries. Due to the effects of globalization, many smaller businesses have been forced to shut down, and their employees have been relocated to larger companies that are more productive. As a consequence of this, there has been an increase in unemployment as well as social unrest, particularly in rural areas.
Globalization has contributed to the deterioration of the environment in South Asia. The region has seen a growth in industries such as the textile industry, both of which have had a significant impact on the environment as a result of their expansion. The population’s health and well-being have suffered as a direct result of environmental degradation, which can be traced back to the increased consumption of natural resources and the improper disposal of waste produced by industrial processes.
The economy of the South-East Asian region has been affected in both positive and negative ways by the phenomenon of globalization. While it has resulted in the growth of industries and increased cultural exchange, it has also resulted in the displacement of workers and the widening of income inequality. While it has contributed to the growth of industries and increased cultural exchange, it has also resulted in the displacement of workers. In order to address these challenges, policy interventions that foster inclusive growth, protect the environment, and create new opportunities for the population will be required. By acting in this manner, countries in South Asia will be able to take advantage of globalization’s positive aspects while mitigating some of its more damaging effects.
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