Let's get you all set for success with your remittance business!
In theory, everything is quite simple, a remittance business also known as a money transfer or money services business, is a financial service that facilitates the transfer of money from one location to another. This includes sending money cross-border/international service, and it usually involves transfers of different currencies between countries. The business model is simple: collecting money from the sender and delivering it to a beneficiary.
When starting to think of your funds flow you need to make a few decisions about the different ways to allow your customers to send money. There are various channels for money transfer, including bank transfers, online platforms, mobile applications, and physical cash pick-up locations, making it convenient for both senders and recipients to access the transferred funds. The choice is yours and you should get into the next steps with a clear view of your minimal viable product (MVP).
Keep in mind these essential steps to establish and operate an effective remittance business that meets regulatory requirements builds trust with customers, and delivers reliable and efficient money transfer services, you should follow as:
Regulatory Compliance: Navigating the Legal Landscape
Familiarize yourself with local and international rules and regulations related to remittance services by regulatory bodies, such as financial authorities and anti-money laundering agencies, and take proactive steps to obtain the necessary licenses and approvals to operate legally in the chosen area. Establishing a solid foundation of regulatory compliance is essential so this involves an in-depth understanding of both local and international rules governing remittance services and engaging legal counsel or compliance experts to ensure every aspect of your business adheres to the stipulated regulations.
Applying for Money Transmitter License (MTL). It's important to note that Money Transmission laws can vary widely between states. Depending on state laws, there are also some exceptions to who is considered a money transmitter. Businesses should always consult with legal and regulatory experts to ensure compliance with all applicable laws and regulations.
Technology and Infrastructure: Software Scalability and Integrations for pay-in, payout, and KYC
Choose a reliable and secure remittance platform or software that meets your business needs to be able to set up the required infrastructure for straightforward and hassle-free transactions but also has the scalability to handle growth. Ensure it supports seamless integration with payment gateways, banks, and compliance systems including robust APIs for pay-in and payout methods, as well as a robust KYC (Know Your Customer) system to adhere to regulatory standards. A scalable and well-integrated platform forms the backbone of your remittance business, allowing for efficient operations and future expansion.
Partnerships and Banking Relationships: Catalyzing Seamless Transactions
Establish robust partnerships with banks and financial institutions in target countries to facilitate seamless money transfers and currency conversions. These partnerships not only will facilitate seamless money transfers but also enable efficient currency conversions, ensuring that your customers' funds reach their intended recipients swiftly and without complications which will enhance the overall customer experience and build trust in your brand.
Pricing and Fees: Striking the Balance for Value and Transparency
Determine competitive and transparent pricing for your remittance services and consider fees, exchange rates, and any additional charges that will be added to any transaction. Setting the right pricing structure for your remittance services is a critical aspect of your business strategy so by conducting a market analysis to understand the competitive landscape and customer expectations your business will be able to build trust with your customers and establish a strong foothold in the remittance market.
Customer Onboarding: Crafting a Seamless Entry Point
Create a user-friendly and hassle-free onboarding process that should include identity verification and customer due diligence to comply with AML/KYC regulations. Implement robust and straightforward verification procedures to establish trust and security and a smooth onboarding journey that sets the stage for a positive customer relationship, enhancing their confidence in your remittance business.
Customer Support: Building Trust Through Exceptional Service
Provide efficient and systematic customer support to address inquiries, issues, and concerns promptly providing excellent service, your business will build trust and loyalty with your clients. Consider employing a multi-channel approach, incorporating methods like live chat, email, and phone support, to cater to diverse customer preferences and demonstrate your business commitment to exceptional service.
Security Measures: Fortifying Trust Through Robust Protections
Implement robust security measures to protect customer data and financial transactions from potential cyber threats. It is essential to protect customer data, financial transitions, and overall business operations and create a secure environment that will instill trust in your customers. Safeguarding customer data and financial transactions is the first priority so implementing comprehensive security measures will instill trust in your customers, assuring them that their information is treated with the highest level of confidentiality and care.
Continuous Improvement: Elevating Service Excellence Through Evaluation
Regularly assess your remittance business's performance, gather customer feedback, and identify areas for improvement to enhance overall service quality. This dynamic approach allows you to identify areas for enhancement, ensuring that your service quality remains at the forefront of the industry solidifying your position as a trusted leader in the remittance sector.
Venturing into the remittance industry offers both opportunities and challenges for startups. Navigating the regulatory landscape, establishing robust compliance measures, and forging strategic partnerships are challenges when you are not familiar with the industry but are paramount in ensuring a successful and sustainable business.
Tango AML’s Rocket Remit—a cutting-edge SaaS platform for the North American market—integrates Thunes’ unparalleled global payments network, spanning 200+ countries, 140+ currencies, and offering competitive FX rates. This partnership addresses critical challenges in the remittance industry, including regulatory compliance, AML (anti-money laundering) requirements, and operational efficiency, enabling businesses to scale globally with confidence.
About Rocket Remit, by Tango AML
Rocket Remit is an all-in-one SaaS platform designed to simplify licensing coverage in the USA and Canada, compliance, and operational challenges for MSBs. With plug-and-play technology, Rocket Remit reduces the regulatory burden, enabling fintechs to focus on scaling their business - fast.
Why Choose Rocket Remit?
- Full licensing coverage for US and Canada
- Advanced AML compliance solutions
- Seamless integration with global payment networks
- Cutting-edge technology for scalable growth
- Pricing options to suit your current & future needs
With Rocket Remit, MSBs get a partner that simplifies the process, reduces the regulatory burden, and provides the technology fintechs need to scale. We handle the complexity, so entrepreneurs can focus on what matters most – growing their business.
Ready to Scale?
Contact the Tango AML team for a demo and explore how our solutions can drive your business forward.
To learn more, visit www.tangoaml.com or follow Tango AML on Twitter, YouTube, Facebook and LinkedIn.
If you’d like to talk to the Tango AML partnership team, send us an email to info@tangoaml.com or contact us here.
Need a reliable technology partner?
Understanding which system is appropriate for your business is a demo away.
