USD INR ₹ 83.37
GBP INR ₹ 103.75
CAD INR ₹ 60.73
Articles

Is Mastercard Mastering The Science Of Money Transfers?

Updated on January 09, 2022 12:34 pm
Mastercard

"There are some things money can't buy. For everything else, there's Mastercard."

Mastercard's famous slogan, launched in 1997, still rings true today. While Mastercard remains one of the most successful financial brands globally, our relationship with money has evolved, especially regarding money transfers.

Technology has redefined the whole financial industry from conventional loans to the blockchain. Traditional banks have the licenses that the challenger brands are chasing, and on the other hand, traditional banks are chasing to innovate. While the tug of war between traditional and challenger banks remains, consumer expectations are rising.



So, is Mastercard mastering the science of money transfers?

The science of money transfer is complex, especially for cross-border transactions. To begin with, when you send money internationally or make a cross-border money transfer, there are multiple players involved. Now, let's look at it from Mastercard's perspective.

2b_MyNsW-8PL6B3nz18BY7oLVoSa1XP2xoqupzr20nE752_UvJi_Idc_vhWoNrm2hnUv4_kozitQs-KQDhjibxtRWAWogHQktSG_-9Sz0_IboTtfJWM2ibQTBJEa4GpHze9k5wWM

The process starts with the party initiating the transfer, which we will call the sender, and ends with the party receiving the funds, which we will call the beneficiary. You have financial institutions and delivery channels to facilitate the money transfer in the middle.

Keep in mind that all parties in the ecosystem need to be compliant with all regulatory requirements of both the national and international laws relating to Know Your Customer (KYC), Anti-Money Laundering (AML), and Countering the Financing of Terrorism (CFT).

Mastercard Cross-Border Services facilitates banks, non-bank financial institutions, and digital partners to send money internationally to any endpoint for any purpose in over 100 countries and 50 currencies.

Any purpose for money transfer from a consumer sending money to friends and family or business sending wages to contract workers to any endpoint could be bank deposit to the mobile wallet.

xaf-vQgEI182LmNS2ysRT9GEoUYWyi7RfHi3tzo6HWp7JjkMF_UYk8UWRvb0Cd76ZNohvBWsWacgoz0XdNtN7JHQnnu0ZaLbO9vyXR3KAb27KSua2m8Q32SgGf8oIfreoWKaDM9M

Mastercard Cross-Border Services connects 90 percent of the world's population for any purpose of money transfer to any endpoint: bank accounts, digital wallets, cards, and cash agents, all through a single and secure point of access.

In the consumer sector, money transfer companies such as Xoom and Remitly have even started offering payouts through multiple channels, including pawnshops in the Philippines, home delivery in certain countries, and digital wallets payouts.

In contrast to this paradigm of rapid digital adoption, businesses continue to make cross-border payments using the same conventional methods. According to the Association for Financial Professionals (AFP), 7 percent of cross-border payments made in the U.S. were still made by check. The receiving side of money transfers remains cumbersome and expensive.

The remaining payments were made electronically and were primarily wire transfers initiated through a bank interface to the SWIFT (Society for Worldwide Interbank Financial Telecommunications) messaging system. Businesses typically tend to rely on their primary bank to conduct these transactions.

bTKW6EYNOXpk1ygUfbklQBUymP-Om7Ss_pB5V1edy0KbSOjdyd4tk6uwTu7TIwKDFPpE7Wq93seoz6ml0yFfdNrnPGkXhirNQiZ9IHs4uJt_P1b4gH2BiCUe4ZFlZx_wgbcD4Zas

While different touch points will have different driving factors, there are a few common goals such as:

  1. Transparency
  2. Accessibility
  3. Low cost
  4. Speed 
  5. Security

Transparency: While cross-border money transfer has remained stagnant for decades, technology advances and market demand drive innovation. Consumers and businesses want transactional and fee transparency - all costs to be known upfront and trackable. Think Amazon, but for money transfer. 

Mastercard is in a unique position to meet the demand for transparency. Currently, Mastercard shows the pricing details and the expected timing of settlement upfront before completing a payment.

Transparency is expensive, slow, and complicated for banks and financial institutions, which brings us to the next factor  - the cost of money transfer.

Low-cost money transfer: Mastercard is a trusted intermediary in a complex payment system. Outside China, Mastercard is one of the top global payment networks alongside Visa and American Express.

Mastercard settles with banks through its existing settlement process allowing for cost transparency and payment speed. Economies of scale and innovative solutions lower costs for all senders.

Accessibility: Mastercard can serve several participants such as banks, non-bank financial institutions, and digital partners to send money internationally to any endpoint for any purpose. Being a trusted brand and a versatile service provider has been equally vital for its success in the current cross-border landscape.

Mastercard provides a compliance framework, and API connectivity for cross-border services are supported in several programming languages and can be easily integrated.

Speed: Consumers and businesses want fast delivery of funds. Delayed payments and payouts have always been a challenge in the remittances industry, and the pandemic only exacerbated this pain point.

Mastercard's capabilities mean that it provides real-time payments in as many markets as possible. Settlement occurs in a range of same day to no more than two days and currently is also near real-time in 11 markets. Mastercard settles with banks through its existing settlement process.

Security: Mastercard is a globally recognized brand and has an extensive network worldwide. It takes a lot of capital and technological expertise to establish new networks and data centers and, most importantly, gain trust from financial institutions and cardholders.

The last reported major security breach of Mastercard was in 2019 that likely affected Belgian and German users, as reported by Bloomberg. Security is a top priority for any brand today. Any breach in security will harm Mastercard more than any stakeholders.

In conclusion, as a brand, Mastercard has successfully curated campaigns that resonate well with the different consumer groups of multi-cultural and ethnic diversity.

Mastercard connects customers to a global platform through a single, secure point of access that enables reach to billions of card, bank, and digital accounts, in addition to cash-out locations, in over 100 countries and growing.

Mastercard has a growing list of global partners that can make money transfers quicker, predictable, and accessible. Mastercard partnerships with the businesses side, both the traditional banks and the challenger banks, will be interesting to watch, especially with the digital-only banks or neobanks such as Monzo and Revolut in the United Kingdom.

The company's ultimate north star is its vast network. The process of building and extending networks is a never-ending process, and it is perpetually evolving to get to the better version of the previous one. The company plans to build up more connectivity directly with the underlying platforms, where that makes sense, especially in high-volume occurrences. The evolution also extends to how the company enables customers to use the network, not just its many endpoints.

 6095 views
Rate article:
(5.0)
 
 
Money Transfer FAQ's
Related Articles
Insurance Risks
Risks That Travel Insurance Can Help Protect (2024)

When planning for an upcoming trip, deciding whether to invest in travel insurance is a significant choice that may be in your best interest not to overlook. Travel insurance serves as a financial safety net, protecting you from a myriad of potential risks during your journeys. As you begin your research, you will notice there are two types of travel insurance: trip insurance and travel medical insurance–also known as visitors insurance. It can be very confusing, we know. But don’t worry. In this guide, we'll delve into the advantages of travel insurance, clarify the distinctions between trip and travel insurance, and provide clarity and insight into its often-overlooked perks.How Important is Travel Insurance?Travel insurance works as a shield against the various financial risks associated with traveling. Whether it's a sudden illness, a missed flight, or lost baggage, having the right travel insurance can alleviate the financial burdens that may arise during your trip.What is the Difference Between Tip Insurance and Visitors Insurance?Long story short, the difference is simple, think of trip insurance as insurance for your trip itself while travel medical insurance–aka visitors insurance–serves as insurance for you while you are on the trip. While both types of insurance offer protection during travel, their primary purposes differ. Trip insurance safeguards your investment in the cost of your trip, while travel medical insurance prioritizes your health and well-being during the journey. Please note that only U.S. residents are eligible to purchase trip insurance, and coverage extends to both domestic and international travel.Exploring the Benefits of Travel InsuranceWhile common risks like trip cancellations and medical emergencies are well-known, there are several benefits that travel insurance offers which many don’t even know about, providing a broader safety net for travelers. Let's unravel just some of these often-overlooked advantages. Benefits of Trip Insurance1. Coverage Beyond Trip CancellationsTrip cancellations or interruptions are inevitable. Trip insurance, with its Trip Cancellation coverage, acts as a safeguard for your invested time and money. It can refund 100% of your trip expenses for covered reasons, including illness or death of you, a family member, or a travel companion, extreme weather, or terrorist attacks.Trip cancellations are a common concern, but travel insurance extends its coverage beyond this. It safeguards your prepaid and non-refundable trip expenses in case of unavoidable circumstances.2. Protection Against Flight DelaysFlight delays or missed connections can disrupt your travel plans. Trip insurance steps in to cover financial losses incurred due to delays caused by factors beyond your control, including extreme weather, natural disasters, plane breakdowns, or accidents on the way to the airport.3. Safeguarding Your BelongingsLost, damaged, or stolen baggage can add stress to your travel experience. Trip insurance offers coverage for delayed baggage, allowing you to claim expenses for essential items after a waiting period. In case of permanent loss or damage, reimbursement is provided to replace the lost items.4. Addressing Unconventional RisksFor situations not covered by standard plans, such as unconventional trip cancellations, opting for a "Cancel for Any Reason" insurance plan provides flexibility. Though relatively more expensive, this upgrade offers reimbursement for refundable trip costs and specific non-refundable deposits.You can also see a more detailed list of what can be covered by your trip insurance. Benefits of Travel Medical Insurance1. Comprehensive Medical CoverageTravel medical insurance largely serves to cover unexpected medical expenses during your journey. This includes reimbursement for medical treatments, ambulance services, and hospital charges in case of illness or injury. This aspect is particularly beneficial for elderly parents traveling to the U.S.2. Emergency EvacuationIn the case that those who are covered by the insurance need emergency medical evacuation some travel medical plans help cover the evacuation. Without this coverage, should you need to be airlifted or evacuated, you could be facing a cost upwards of ten thousand dollars.3. Emergency Medical ReunionIn the unfortunate case that you face a major medical emergency during your travels, travel medical insurance can cover the transportation of your loved ones from back home to be there with you during your hospitalization. 4. Trip InterruptionIf you have to cut your trip short, some travel medical insurance plans would cover their stated amount for the non-refundable, unused travel expenses that canceling your trip halfway would incur. Make sure you read the details of the plan you are planning to purchase thoroughly to see the extent of coverage if unexpected interruption is something you are concerned about. You can also see a more detailed list of what can be covered by your visitors insurance. Choosing the Right Travel InsuranceIt's crucial to recognize that different insurance providers offer varied coverage plans. Factors like non-refundability, traveler's age, pre-existing conditions, the value of luggage, and existing coverage from health insurance, life insurance, renters' insurance, or credit cards play a role in determining the best travel insurance plan.If you are someone who travels frequently or are purchasing travel insurance plans for parents who plan to make the same trip often, we also suggest looking for a travel insurance plan with easy renewal. Do not worry, most plans today have a very easy renewal system so you can travel again and again with no hassle. Who Should Opt for Travel Insurance?Trip Insurance: Opt for travel insurance if you're concerned about trip cancellations, interruptions, or non-medical incidents. It's ideal for travelers who have invested significant sums in their trip and want financial protection against unforeseen events.Travel Insurance: Choose travel medical insurance if your primary concern is health-related emergencies during your trip. It's essential for travelers who want comprehensive coverage for medical expenses abroad, ensuring access to quality healthcare without worrying about exorbitant costs.Visitors insurance is also the best option for those looking to purchase travel insurance for their parents visiting or traveling.  Related Article: Visitor Insurance for Parents Visiting USAConclusion: Empowering Your TravelsIn conclusion, travel insurance is not merely a safety net; it's a comprehensive companion that grants peace of mind during your journeys. As you plan your next adventure, take the time to understand the nuances of travel insurance, evaluate your options, and ensure you have the best travel insurance plan tailored to your specific needs.__FAQs: Demystifying Travel Insurance FearsWhat does travel insurance cover?Travel insurance typically covers a range of risks, including trip cancellations, medical emergencies, delayed or lost baggage, flight cancellations, and certain unexpected incidents.Does my health insurance cover international travel?Most health insurance policies have limited or no coverage for international travel. Travel medical insurance is specifically designed to address the unique risks associated with traveling abroad.Does travel insurance cover illnesses?Yes, visitors' insurance often covers medical expenses incurred due to new illnesses during your trip. This includes reimbursement for medical treatments, ambulance services, and hospital charges.Does travel insurance cover flight cancellations?Yes, trip insurance typically covers flight cancellations due to reasons such as illness, extreme weather, or other unforeseen circumstances. Reimbursement for prepaid and non-refundable trip expenses is common.Does travel insurance cover COVID-19?Many travel insurance plans provide coverage for COVID-19-related expenses, including medical treatments and trip cancellations. However, coverage details may vary, so it's essential to review your policy.What should travel insurance cover?It depends on whether you opt for travel medical insurance or trip insurance. Ideally, trip insurance should cover delayed or lost baggage, trip cancellations, etc. While travel medical insurance should cover a broad spectrum of medical risks, including medical emergencies, unexpected incidents, a necessary visit to urgent care, etc.. The coverage should align with your specific travel needs and potential risks.Does travel insurance cover hurricanes?Yes, trip insurance often covers trip cancellations, interruptions, or delays caused by hurricanes or other natural disasters. It's essential to check the policy details for specific coverage related to natural calamities.Does travel insurance cover rental cars?Travel insurance may offer coverage for rental cars, typically covering expenses related to theft or damage to the rented vehicle. It's advisable to check the specific coverage details in your travel insurance policy.Does insurance cover travel vaccines?Travel insurance usually does not cover the cost of travel vaccines. This expense is often considered a preventive measure and falls outside the scope of typical travel insurance coverage.How easy is it to renew visitor's insurance?Renewing visitor's insurance is generally a straightforward process. Opting for policies that allow easy renewal is advisable, as it saves time and ensures continuous coverage.

Last Minute Diwali 2023
Last-Minute Gift Ideas for Diwali 2023

Diwali, the Festival of Lights, is a time of joy, celebration, and the exchange of gifts. As Diwali 2023 approaches, finding the perfect gift for your loved ones can be a delightful challenge. Whether you're running short on time or looking for thoughtful last-minute gift ideas for your sister for Bhai Dooj, we've got you covered. In this article, we'll explore the essence of Diwali, its significance, key dates, and suggest creative ways to send gifts using remittance services.What is Diwali? Diwali is a prominent Hindu festival celebrated with enthusiasm across India and among the global Indian diaspora. It symbolizes the victory of light over darkness and good over evil, with a rich cultural and spiritual heritage. A time full of vibrant rangoli, crackling firecrackers that light up the night, and aromatic food being passed around, Diwali spans five days of festivities, each with its own rituals and significance.Families illuminate their homes with diyas (oil lamps) and candles, create beautiful rangoli designs, and indulge in sweets and savories.Why is Diwali Celebrated?Diwali celebrates the victory of good over evil and light over darkness. It's a time to seek blessings for prosperity and happiness. The exchange of gifts during Diwali is a way to show love and appreciation for one another, enhancing the festive spirit.Key Dates for Diwali 2023:Dhanteras: November 10, 2023The first day of Diwali, dedicated to the worship of Lord Dhanvantari (the physician of the gods) and goddess Lakshmi. People buy gold, silver, and utensils on this day.Naraka Chaturdashi (Choti Diwali): November 11, 2023On this day, Lord Krishna defeated the demon Narakasura, signifying the victory of good over evil. It's a day of cleansing and lighting lamps.Diwali (Main Day): November 12, 2023The most important day when families come together to perform Lakshmi Puja (worship) and light oil lamps or diyas to illuminate their homes.Govardhan Puja: November 13, 2023A day to worship Lord Krishna, who lifted the Govardhan Hill to protect the villagers from torrential rain.Bhai Dooj: November 14, 2023A day to celebrate the beautiful bond between brothers and sisters, with sisters applying tilak on their brothers' foreheads.Last-Minute Diwali Gift Ideas1. Digital Gift CardsConsider sending digital gift cards from popular online retailers. These cards allow your loved ones to choose their perfect gift, ensuring they get something they truly desire. Many remittance services offer the option to send digital gift cards along with money transfers, making it a convenient choice for last-minute gifts.2. Money TransfersSending money home for Diwali is a practical and thoughtful gift. Online remittance services like Wise, Instarem, Abound, Xe Money Transfer, Wo Transfer, etc. offer quick and secure transfers, enabling your family to make Diwali purchases, decorate their homes, and prepare delicious meals. It's a versatile gift that allows your loved ones the freedom to use the funds as they see fit.To find which money transfer service is the best one for you, check out our catalog of reviews and guides, all designed to help you see the complete ins and outs of the many remittance services on the market to make the best decision for your needs. We invite you to compare remittance providers using CompareRemit’s comparison tool today to find the best rates, lowest fees, and fastest turnaround times for your specific destination and transfer amount.3. Subscription ServicesGift subscriptions to streaming platforms, magazines, or online courses. These subscriptions offer entertainment and knowledge, making them valuable and enjoyable gifts for your loved ones.4. Personalized Diwali HampersPut together a personalized Diwali hamper with traditional sweets, homemade treats, and small decorative items. Include a heartfelt Diwali card to add a personal touch. Sending a picture of the hamper along with a digital money transfer can be a delightful surprise for your family.5. Online Shopping VouchersOnline shopping vouchers from popular e-commerce platforms allow your loved ones to pick their favorite items. These vouchers can often be emailed directly, making them an excellent last-minute gift option.In the spirit of Diwali, the joy of giving is unparalleled. Embrace the true essence of the festival by spreading happiness, love, and prosperity. Even in the last minutes leading up to Diwali, these thoughtful and practical gift ideas ensure your loved ones feel cherished and valued. Utilize reliable remittance services to make these gestures of love possible, bridging the distance and connecting hearts across the globe.For all of your money transfer needs, visit our homepage for more information on how to find the best option for you and your family this Diwali. Here you will be able to compare exchange rates between the top remittance companies, find the best rates, learn how to get started, receive exclusive offers, and more. This Diwali, let your gifts illuminate the lives of your dear ones, just like the radiant glow of diyas brightens the darkest of nights. Happy Diwali!

Money from India to UK
Best Way For An NRI to Repatriate Money From India to UK

 When it comes to repatriating large sums of money from India, it puts every NRI in a situation where he has to consider different obligations regarding monetary cross-transfer. Taxation, reliability and transfer timelines are a few things that influence these decisions.Personal finances have to be dealt with delicately and ensured that there is no loss during the due process of remittances. There are various options available in the marketplace today, be it via traditional banking or the modern ways of online transfers.CompareRemit offers a platform that allows you to compare different players in the market and pick the best rates that suit your needs.Repatriation from an NRE AccountAs a component of the liberalization scheme of the Reserve Bank of India, remitting funds from India has become relatively easier. Balances in NRE (Non-Resident External) accounts are freely repatriable. No formalities or requisite permissions are required for remittances abroad be it any amount. Funds in accounts are usually funds deposited from abroad or current income like interest or dividends on investments made through foreign funds.Repatriation from an NRO accountBalances in NRO (Non-Resident Ordinary) accounts are subject to certain conditions. The remittance of USD 1 million per financial year from NRO accounts is allowed subject to certain procedural formalities. NRO account balances include income earned locally or certain capital account transactions. Form 15-CA and 15-CB need to be submitted before a remittance can go through.Read more on difference between NRE and NRO account on CompareRemit.The Traditional Option - BanksThe most sought after choice for remittances to the UK are banks. Banks are the most popular means of transferring money to the UK because:There is a high level of trust owing to the various government regulations.Familiarity and the comfort of knowing the neighborhood-friendly banker.There are two ways one could remit funds using banking services:Online - If your bank has given you access to internet banking and allows repatriation through online instructions.In-Person - One could walk into the bank yourself and have the formalities completed there and then and have the satisfaction of seeing it to its destination with a receipt in your hand.However, it is important to note that INR to GBP/GBP to INR exchange rates may not always be competitive. The transfer fees can be high and the charges, not always transparent.Selection of Remittance Service ProviderShould you want to avoid remitting through banks, approaching a marketplace of money changers would be the next best option. A selection of remittance service providers should be made based on the following:- Transfer chargesSpeed of transferExchange ratesCharges on the conversion of currency (INR to GBP)Freeze option on exchange rate while process requirements are completedFlexibility of payment optionsAlternative Options for Remittance from India to UKWise - UK based transfer service supporters - Wise incorporates credit cards/debit cards, SWIFT, international transfers to bank accounts, domestic wire transfers and more. Wise offers competitive exchange rates for pound to rupee or rupee to pound conversions. It assures fast and low-cost online money transfers from India to the UK.ExTravelMoney - One of the easiest services for transferring funds from India to the UK, they also offer the facility of booking orders online.Western Union - In four easy steps available online and your money is sent from India to the UK. They offer competitive rates and faster transfers as well.Thomas Cook - Provides the best foreign exchange rates besides giving the assurance of secure and timely remittances for specific purposes.BookMyForex - With zero commission and zero charges, they claim to send money from India to the UK at guaranteed lowest exchange rates. The time span for the transfers to be effective is 12 to 48 hours.To select the right money transfer service one should keep the cost and time factors in mind. Convenience at a reasonable cost should be the mantra for selecting a suitable remittance service provider.

Download the CompareRemit App
Download the CompareRemit App
Personalize your CompareRemit experience with your preferred corridor and receive target exchange rate notifications, seamless transitions to partner apps, and real-time comparisons of top remittance providers at your fingertips.
Personalize your CompareRemit experience with your preferred corridor and receive target exchange rate notifications, seamless transitions to partner apps, and real-time comparisons of top remittance providers at your fingertips.

Get Listed or Advertise

Download Our Free App

Try our faster, enhanced mobile app for a better experience

CompareRemit App