If you want to dive into the world of finances...

in Fintech

You may face a lot of interesting challenges and discoveries while starting a new project in a new country. One of those was for us a banking project from Nigeria. And one more experience that reminds us all the necessity of discovery phase.

So we gonna have a little talk about Kindgeek’s experience with financial services. The first question will be: “how to choose ‘right’ money transfer service?”, and definitely not the last. So, we decided to share some conclusions of our discovery.

Remittance to major receiving countries of Africa has fallen for the last year, including Bangladesh (-11.1 percent), Nigeria (-10 percent), and Egypt (-9.5 percent).  

And that’s not because there are no people who want to send money abroad. The reason is that sending money abroad is usually unreachable and always disturb us as a difficult process with a lot of documentation. 

So how to find the best payment service provider to send money to another country?

Our main object was Nigeria. 

While developing a project related to financial systems, there are major factors to process:   

1. Secure transfer services are big and reliable services such as Western Union and Money Gram.

For example, Western Union one of the most reliable and oldest financial services, which use such policies and procedures as photo identification and tracking number (MTCN) verification to make sure money's sent to the right person.

2. Cost of transactions depends on transaction fee and exchange rate. 

All banks and money providers have different fee structures, and they all take different margins on the daily exchange rate. Depending on the size of your transfer, you can save hundreds of dollars by comparison before you send money with your bank.

So pay attention what service you want to choose and remember all next lessons learned :

  • Money transfer fees can vary greatly depending on your provider

  • Watch out for the margin on the exchange rate 

  • Your recipient may also be charged to receive foreign payments (many banks charge their customers between $15 and $30 to receive international transfers)

  • There is a minimum and a maximum amount of money to send per transaction, day, week or month or year.

3. Time

  • If you make direct bank payment  it can take up to 3-5 days due to work with banks

  • If you send to bank account it can take 1-2 days 

  • If you send money to credit/debit card it can be done in minutes but expensive.

4. API availability. 

If you're involved with integration, you have to be well-versed with application program interfaces (APIs), which are tools that make it possible to manage software applications. A startup, for example, may want to open its API, as doing so encourages third parties to use its software. 

5. Different channels to send money

Taken from: https://developer.mastercard.com/product/mastercard-send

Additionally, there are different payment sending channels, delivery channels and payment instruments which we can use to send money.

6. Legislation and regulations. In spite of what you want to develop, you have to do it by the rules of the financial world.

The primary financial institution for regulation of banks is the National Bank of a country that is empowered to supervise and regulate banks and other financial institutions. That’s why all money operators you choose and are going to integrate with, need to be allowed and licensed.  

There is one more thing is important to work thru, when you are going to develop a financial application and you work with personal sensitive data, you must be careful and meet all requirements to storage terms and conditions. Sensitive personal identifiable information (PII)  - is information which, when disclosed, could result in harm to the individual whose privacy has been breached. For example, the most prominent federal privacy laws in the USA :

- The Federal Trade Commission Act 

- The Financial Services Modernization Act 

- The Fair Credit Reporting Act

- in Europe- General Data Protection Regulation. 

And the last one, if you want to work with storage payment cards you need to follow Requirement 3 of the Payment Card Industry’s Data Security Standard (PCI DSS)  to “protect stored cardholder data. “ 

Consequently, there are a lot of payment service operators, but when you dive into the process, you can find only a few services, which meet business needs of your project.

 Written by Oleksandra Denysenko and Viktoriya Fedyuk