Remittance is a process in which one person/group sends money to the other person/group in another country. This service has been provided for years, and there are a large variety of remittance companies established in Indonesia, both traditional and bank-based. However, the common remittance company Indonesia has been struggling to improve the remittance service and attract more users.
Why is that an important thing to consider? What makes remittance a very important service to improve? Who will benefit from the improvement? Here, you will find out all the answers you need to know about remittance and how remittance service company Indonesia tries to improve it.
Here are 4 reasons why the current remittance system needs an overhaul
1. High transfer fee
It is commonly known that a remittance company Indonesia puts a large amount of transfer fee. And this holds true to many remittance companies, in which they charge the customer for US$20-35 per transaction. When combined with other factors like the transfer amount, rate exchange, and hidden fee, the average transfer rate can reach 6.84%.
2. High bank exchange rate
Aside from the transfer fee, the exchange rate is another factor that increases the overall transfer fee. The rate provided by the remittance company Indonesia, both traditional and bank, tend to be higher than the usual rate. It is due to the company putting hidden charge to the transfer fee in the guise of “Free of charge” policy.
But even with the high transfer fee and rate exchange, how is 6,84% amount a big deal? To explain that, consider a case in which a person plans to transfer US$15.000 overseas with the help of a remittance company service Indonesia. With that amount of transfer, the overall transfer fee would most likely reach US$1,026, which means the receiving end would receive only US$13.974.
3. Additional fee for transferring with the same currency
As if the high transfer fee isn’t enough, a remittance company Indonesia can also charge an additional fee. In this case, transferring with the same currency, usually from US$ to US$, will be charged 0,125% from the total transaction. It means, if you were to transfer US$15.000, the company would charge an additional US$18.75. Adding that to the previous fee, you’ll be charged US$1.045 rounded up, which is still a large number.
4. Remittance procedure takes a long time to finish
Using the service of an average remittance company Indonesia, you’re bound to have a long remittance SOP.
First, the sender must visit the remittance service company Indonesia and file in the requirements along with the money. After receiving the bank’s approval, the remittance receipt will be made. Then, the receiver will also file in their ID and wait for the receiver’s bank’s approval. Finally, the money will be able to be taken, minus the whole transfer fee.
All things considered; the whole process takes a very long time to finish. The fastest amount of time consumed is 2 days, while the longest one is 4 days. Mind you; the process may take even longer to finish if there are issues with the documents or the corresponding banks.
In short, the current remittance SOP committed by the common remittance company Indonesia has issues with the service fee and length. Not only is the current system expensive due to high total fee, but it also takes a very long time to finish. And finally, the system has now become inconvenient in this fast-paced society that demands portability in the service.
But why is remittance trusted in Indonesia crucial?
If you believe remittance has nothing to do with you, think again. Service improvement committed by the remittance company Indonesia can benefit a lot of different people and causes, and ultimately to your benefit as well. Here are the reasons why improvement is needed.
1. To support Indonesian diaspora across the globe
As it turns out, there are a lot of Indonesian people living outside of the nation, scattered across the globe. Many of them are working overseas with personal reasons, and they deliver the salary to their friends, family, or loved one who lives in Indonesia. Because of that, they pretty much rely on remittance to transfer the money to Indonesia. And consequently, remittance company Indonesia needs to improve for their sake.
On the other hand, there are also a lot of Indonesian students studying overseas. To gain financial support from their parents or benefactors from Indonesia, usage of remittance service is necessary. It is even more important when you consider that Indonesian students overseas receive an average of US$3.000 monthly from Indonesia.
Both sides represent the different sides of Indonesian diaspora in P2P remittance. Workers are the senders, while the students are the receivers. If a remittance trusted in Indonesia manages to improve the service, it'd stabilise the cash flow from both sides.
2. To support expatriates living in Indonesia
However, Indonesian diaspora isn’t the only P2P side that needs remittance. Expatriates living in Indonesia also rely on remittance service company Indonesia to deliver money to their countries. Although they only deliver an average of US$500 monthly, that’s still a large amount to consider.
3. To fund local communities and organisations
Some communities and organisations rely on remittance company Indonesia to receive or send money overseas. Some of them is a branch of international groups, while the others being local groups receiving support from the other countries. The money received is mostly needed for the growth of the groups to create an event or for emergencies.
4. To help the local company’s B2B service
Local corporations also rely on remittance service company Indonesia to commit B2B services with overseas companies. The purposes of this situation are mostly for investment, invoice payments, and mortgage, to name a few.
Every month, the amount of remittance committed to this cause reaches US$300.000. That’s a massive amount, which is helpful not only for the companies but also for Indonesian government.
By improving the remittance service in Indonesia, the government will attract more investors and overseas companies to commit B2B with the nation as well. In turn, it will contribute to the growth of the nation, as it improves the financial issues in infrastructure development.
Everybody wins, correct?
Here are interesting facts about remittance in Indonesia
Because of those reasons, it’s no secret that remittance has occurred for years in Indonesia by the remittance company Indonesia. It means remittance is one of the most important sources of cash flow both for P2P and B2B. And speaking of that fact, there are also other interesting facts to consider regarding remittance.
1. The highest amount of P2P remittance to Indonesia is US$3.4 billion
Indonesia is among the top 5 receivers when it comes to P2P remittance. Out of the variety of nations transferring money to Indonesia, Saudi Arabia is the one that delivers the most, reaching US$3.4 billion. The second nation goes to Malaysia, which sends US$2.1 billion to Indonesia.
2. The highest amount of P2P remittance from Indonesia is US$359 million
On the other hand, Indonesian citizens also utilise remittance company Indonesia to send money overseas very often. The largest amount of transfer goes to China, reaching US$359 million, while the second one goes to Thailand, reaching US$116 million.
3. Remittance occurs frequently
Remittance to and from Indonesia also occurs very frequently. The process tends to happen bi-weekly, monthly, or once in 3 months. It shows how significant remittance service in Indonesia is, urging the remittance service company Indonesia to improve the remittance service.
4. Remittance SOP is open for technology improvement
With a high rate of technology advancement, remittance SOP can benefit from that for improvement. It is supported by the fact that the demands for improvement come from the continuous changes in the users’ behaviours. They wish for a more flexible and mobile remittance process at a quicker pace, as well as a competitive exchange rate.
As you can see, remittance is a very vital and common service in Indonesia. And because of its high potential, there’s room for improvement that can be done by the remittance company Indonesia, to attract more users.
And here are the best solutions to improve remittance service in Indonesia
To solve the issues currently at hand, the common remittance company Indonesia needs to revamp the service quality. Here are 4 of the best solutions that are realistically possible to do.
1. Becoming web and mobile-based
As technology continues to grow at a faster pace, society will demand a faster and more convenient process as well. Ergo, the remittance company Indonesia needs to improve the service to become portable.
The first step that has been done by several companies is to move the remittance service to a web-based service. However, a mobile-based remittance service would be even more helpful, given that smartphone users around the globe are increasing every year.
2. Easier end-to-end process
By upgrading the remittance service to the web and mobile-based, it will also make the end-to-end process easier. After all, if a mobile-based service is used, visiting the remittance service company Indonesia won’t be necessary. It means you won’t have to queue and wait for approval in hours or days. Everything will be easier, faster, and more convenient.
3. Reducing overall fee
Aside from convenience, one of the biggest issues that make remittance trusted in Indonesia harder to find is the fee. Therefore, to increase the interest of utilising remittance service, a reduction in the overall fee is mandatory. The transfer fee shouldn’t be higher, the additional cost for transferring with the same currency shouldn’t be necessary, and transparency should be important.
4. Having a more competitive exchange rate
Many users are also turned off by the high exchange rate provided by the remittance company Indonesia. As mentioned before, this is commonly caused by a hidden fee added to the exchange rate. Ergo, having a more competitive exchange rate will most likely attract more users into using the remittance service.
The industry of remittance service company Indonesiahas been working hard to make an overhaul to the service quality. One of the latest by-products is Transfez, a remittance service committed to making remittance trusted in Indonesia.
Introducing Transfez, making remittance trusted in Indonesia
Transfez is one of the first remittance apps in Indonesia, built by PT. Indo Koala Remittance, a registered remittance company Indonesia. Founded in 2010, the company was then licensed and supervised by PPATK and Bank Indonesia and continues to improve remittance service in Indonesia.
In 2011, the company created its first remittance service under the brand name “Indo Koala Remittance.” This web-based service was marketed as a digital remittance service, provided P2P service until 2018 for Indonesia-Australia route only. Back then, the transaction occurred only through e-mail and WhatsApp and delivered Hawala system, which garnered a total of AU$22.6 million.
However, that alone was not enough. To improve the remittance service, the remittance company Indonesia decided to create an overhaul in the web-based service. Now branded as Transfez, this new mobile-based remittance service will launch on October 2019 and bring several improvements to make remittance trusted in Indonesia.
Here’s how Transfez improves remittance service in Indonesia
1. Covers over 70 countries
As an established remittance company Indonesia, Transfez has covered over 70 countries, also providing multiple currencies aside from US$. Nine of the notable regions serviced by Transfez are UK, Europe, Japan, Philippine, Korea, India, Singapore, Malaysia, and Australia.
2. Up to 80% cost reduction
Unlike many remittance companies in Indonesia, Transfez offers a remittance service with a very competitive rate. The overall rate has up to 80% cost reduction compared to the common remittance service company Indonesia.
3. No hidden fee
Additionally, the overall cost reduction is wholeheartedly transparent, by which users can see where the fees are for. It helps keep remittance trusted in Indonesia, as well as supporting the growing interest in remittance.
4. Fast remittance process
Due to its mobile-based app service, Transfez can provide a faster, more convenient end-to-end process. Unlike the common remittance company Indonesia, the length of the remittance only takes a day at max. And for several countries, the remittance process even finishes in real-time, such as the 9 regions mentioned above.
One of the biggest advantages Transfez has that other remittance companies don’t have is the app-based service. You can commit remittance everywhere you go, at any given time. And because the company is licensed and supervised by Bank Indonesia, you can rest assured that the transaction will be safe.
6. Competitive exchange rate
Lastly, Transfez has a more competitive and sensible exchange rate. It is because there’s no hidden fee applied to the exchange rate, which also is a part of the 80% cost reduction.
To sum it up, Transfez is a new and revolutionising app-based remittance service. It offers a very competitive rate for a cheaper transfer fee, with convenient SOP that’s fast-paced and helpful for the users. Therefore, Transfez has improved beyond the common remittance service company Indonesiaand will continue to improve the service even more.
9 countries that have been serviced by Transfez
Although Transfez provides the service to over 75 countries, there are 9 notable regions already covered. And they are:
· Japan: Flat fee regardless of the transfer amount, same-day or D+1 process
· UK: Flat fee, within 2 hours
· Europe: Flat fee, next-day process
· Korea: Flat fee, real-time process
· Philippines: Flat fee, same day or D+1 process
· India: Flat fee, same-day or next business day process
· Malaysia: Flat fee, same-day or next business day service
· Singapore: Flat fee, same-day service
· Australia: Flat fee, next-day service
It is worth to note that other countries and regions are serviced with similar, if not same quality service. Also, the flat fee contributes to the 80% cost reduction compared to the service provided by the common remittance company Indonesia.
So, ready to improve remittance service in Indonesia with Transfez?
By knowing the significance of remittance in society, it is enough to say that an overhaul in the service is needed. With Transfez, you’ll have an amazing and improved remittance service with all the convenience and affordability you need. And at the end of the day, it also helps make remittance trusted in Indonesia, thus making remittance an even better service for everyone. So, ready to make a change with Transfez?