For decades, the battleground for remittance firms centred around one question: how can we make fees cheaper?
New firms entered the market offering more competitive pricing than the incumbents, shaving pennies and pounds from the cost of sending money internationally. As a goal, this made a lot of sense. Cross-border payments still cost far more than their domestic equivalent, so it’s no wonder businesses have constantly sought to bridge that gap. In fact, at this year’s G20 summit, improvements to cross-border payments was named as one of the top priorities for global finance.
But while attention has been on pricing, the importance of customer experience has quietly grown larger. So are we heading into a future in which customer experience is the biggest point of competition between remittance services?
The demand for better customer experience
Just 10 years ago, digital international payments were still in their infancy. For global remittance leaders MoneyGram, digital payments only made up 2% of their transaction volume - a figure which is estimated to be similar for Western Union, another remittance powerhouse.
That’s not the case anymore. The Covid-19 pandemic accelerated a shift in every part of finance towards digitisation. This was particularly crucial for remittance businesses, whose customers rely on sending money home, and suddenly were unable to make transactions in person.
Digitisation has become a race, with winners less likely to be those who can combine low fees with an easy-to-understand, easy-to-use service for both sender and recipient.
This has only been further compounded by a general raise in expectations when it comes to digital services. Brands such as Facebook and Amazon have set the standard for user experience, one which all businesses - including financial services - are being measured against.
To date, traditional financial services have not been doing well. Only 44% of online banking users describe the service as easy-to-use, with that number dropping to 34% for mobile banking. This is something financial service providers have to take seriously, as 80% of customers will switch to a new provider if they have more than one negative experience.
So, the million dollar question is: what exactly does good customer experience in remittance services look like?
Top class customer experience for remittance services
The good news is, you don’t need to reinvent your entire remittance business. Tweaking specific processes can see you attract customers from slow-to-adapt competitors and, most importantly, retain them. Here are some of our best examples:
Make simplicity king: Many people are still new to using digital remittance services, they do not want (or need) all the bells and whistles. They want something incredibly easy to use which they can trust. Many of the payments processes involved in running a remittance business can be plugged in via an API as a form of embedded finance - they can now be completely integrated into whatever front-end you build. Therefore, you just need to focus on the crystal-clear user interface and all the services you need will be working behind the scenes.
Be there to help, and let them help themselves: It’s easy to fall into the trap of thinking that the convenience of digital services comes with a tradeoff in human interaction. Yes, you get a slick app, but if anything goes wrong, good luck getting someone on the phone.
This simply isn’t true.
But with a digital service offering, the type of support you provide has to change. Allow your customers to find their own solutions with detailed FAQs or resource centres. More than 75% of customers would prefer to sort out an issue on their own, but of those who try, only 9% are successful. Making information easy to find and easy to interpret will help to deliver on an industry-leading customer experience.
Enhance functionality: This again links to simplicity. If certain users would prefer to pay by debit card, why not let them? If others prefer bank transfers, that can be provided as well. Payments providers are able to integrate different methods into your remittance business through a single API. Giving customers greater flexibility enables them to use your service without having to switch whichever payment method they currently use.
This also applies to the recipients of funds. Can money be received in more locations? Can the process for accessing funds be streamlined in any way? How will people without bank accounts receive money they are being sent? The easier it becomes for those receiving remittance, the more likely a sender is to choose your service over another.
The pandemic may have accelerated digitisation of financial services, but when it comes to an end, there will be no going back. Creating a best-in-class customer experience is one of the best uses of resources for remittance businesses right now. Downward pressure on fees will still exist, but if you’re not considering your customer experience, you may find yourself turning up at the wrong fight.