Many have horror stories in regard to being stuck in a foreign land while on a vacation and running short of money or facing an emergency after official working hours, and needing money asap. For such extreme conditions we have forever been thankful to technology for changing so much that one can easily access their hard-earned money in the times of need. What started the whole trend was the advent of ATMs and then came the CDMs. Now as we are slowly and steadily becoming global citizens, it is again technology that is coming to our aid. With its help, we no longer have to conform to traditional office hours and we can hence help ourselves and our loved ones financially, irrespective of our location and the difference in the time zone.
How Money Transfer Has Changed
We can’t talk about the future without talking about our past. In the good old days, transferring a certain amount of money back home or to a family member who is based another city or country involved a lot of under the table bribing. The following are the official means of transferring fiat pre- technological revolution.
- Foreign Exchange Transfer: Back in the day, there was a flourishing black market of US dollars and UK pounds. Any student or traveler visiting these 2 countries could carry a maximum of 200 dollars that too only in traveler cheques. Needless to say, this restriction caused a lot of issues for young students.
- Smuggling of foreign exchange or Hawala route: One of the most commonly occurring crime back in the 70s was smuggling of currency. It used to be hidden inside coat linings or inside suitcase covers. Another form of this smuggling was paying an agent to do the needful. So if one wanted send US 400 dollars the sender had to pay a fee an additional US 50 dollars as bribe to undertake the risk.
- Money Order via snail post: Officially, there was a manner of sending money. Using the official post service, one could send a money order in which one would pay a sum to the post master, and who would forward the same to the receiver’s post office zone area. This amount reached in a week’s time or so. But, here too, hierarchy played its hand. The landlord of the post office premises, usually took a pay cut in each and every money order that was received. So, if one sent US $100, the receiver would end up with approximately US $ 85 in hand. Another option was ‘Telegraphic money order’ in which a message was sent to the postmaster across states and then the amount was paid back post-delivery.
- Registered / Insured letter: One of the most obscure manner of money transfer was when one would buy a particular gauze lined thick envelope from the post office and then insert currency notes in them. Then, one would stitch through the middle of the envelope holding the currency in place. Then on the stitching a small amount of hot wax was poured and then sealed. Furthermore, this envelope is insured for additional security.
Reading through this, it makes one realize how bleak the past was. Technology and its mass adaptation has definitely made things easier.
The correlation between the mass adaptation of technology and internet services including smartphones and the development of financial technology and its many apps has made things easier for all. The general public experienced a pseudo financial revolution with the advent of credit and debit cards to replace cash. With the inception of e-commerce business model, fintech innovation has become the norm.
Technologies Galore: How Financial Technology Has Changed
One of the greatest things about the advent of technology, is that the change doesn’t stop. Now that the wheel is in motion, the ever-present change is once again making its presence felt. In recent times, there has been a hoard of changes added to the fintech industry which have made money exchange easier. Some of the luminaries of the same are:
- Mobile apps like PayTM and PayPal: Smartphones have opened doors for application that cater to monetary services. One can use them to purchase goods, transfer money, and also save our hard-earned money on their wallets for emergency needs.
- Services like Western Union and Global Money for instant money transfer: Money exchanges have deleted many steps involved in the process of global money transfer. A huge sum can be transferred instantaneously to the other side of the globe. All one needs to avail such service is pay a minimal charge as transaction fees.
- Decentralized crypto exchanges: Fintech Blockchain has revolutionized the concept of currency. Who in their right mind would have thought that money shall change its avatar? Thanks to Satoshi Nakamoto, we saw one Bitcoin have more value than a bar of gold! Many have invested in cryptocurrencies and hence, crypto exchanges are being used all over the globe. This, decentralized process is the latest in the ever evolving fintech innovations.
There you have it folks! The above mentioned are a chronicle of the evolution of fintech innovations. We are sure that soon, the current trends such as Fintech Blockchain too shall become a thing of the past and new ways shall become the norm. Keep your eyes open in this sector folks!