FinTech advances bring financial freedom to global workersby Hal Ramakers May 24, 2019
The efficiency and ‘anytime-anywhere’ availability of the digital economy is a well-known and loved facet of the western world. We can transfer funds between accounts, deposit checks using our smartphones, and even split the bill at dinner with the use of a few emojis. However, experiencing FinTech as a new and exciting frontier is quite different for people in numerous countries around the world. For many in developing countries, a cash-based economy is a norm, and digital banking is new – if not uncharted – territory.
Today, there are 164 million migrant workers in the world, many of whom leave home in search of income because jobs are unavailable at home or the available jobs don’t pay enough. They usually work long hours to earn income that will give their families better lives. An estimated 800 million people worldwide are directly supported by remittances from loved ones abroad. In many cases, those loved ones are unbanked, which adds another layer of complexity. However, advances in FinTech are giving migrant workers greater control over their finances and making it easier to manage, spend, and share their income.
Facing a lack of sustained economic development, political instability, a growing population with double-digit unemployment levels as well as low wages, 2.3 million Filipinos work abroad. The cruise industry has been an attractive option for these individuals – one-quarter of the world’s seafarers are Filipino.
Remittances are incredibly vital to the country’s economy. Migrant workers send $31 billion a year back to the Philippines, which accounts for approximately 10% of the country’s gross domestic product – the government requires 80% of every Filipino worker’s base salary to flow back into the Philippines. It’s easy to see why the country has what many consider to be one of the most organized and centrally controlled overseas recruitment processes, which is primarily managed by the Philippines Overseas Employment Administration (POEA).
Historically, managing finances and sending money home while at sea hasn’t always been easy for migrant Filipino workers. Most cruise lines are forced to rely on direct satellite connections for internet, which are slow and costly. Crew members often bear the cost for non-essential internet usage, making it expensive and time-consuming to price shop exchange and transfer rates while onboard. Essentially, crew members must spend their hard-earned income to send money home to their families. An extra dollar spent for a transfer might mean one less meal for their families. Additionally, long lines further complicate sending money back home for those crew members who disembark to transfer money during the limited time at port.
Traditionally, cruise lines have had little ability to streamline delivery of payroll over multiple countries and currencies to workers, some of whom have no bank account. They overcame this challenge by paying employees in cash, which was dangerous, came with a high risk, and saddled the employee with the burden of currency exchange and expensive transactions to send money home.
FinTech Advances Improve Life at Sea
Each migrant worker has a different story, background, and need. Some send money home for their kids to attend school while others are just trying to put food on the table. The common link between them all is the need to manage and send money while away from home.
Today, advances in FinTech and the widespread adoption of mobile are meeting that need.
FinTech is simplifying cross-border payroll for cruise lines and enabling them to pay crew members via direct deposit, which also eliminates the risks associated with cash payroll distribution. Crew members are paid digitally on a prepaid debit card and can manage their money from a mobile app that is engineered to function in low-bandwidth technology environments, white-listed onboard, and designed to work when less-than-optimal internet connections are available, no matter the location. They no longer have to pay internet fees, so it’s easy to send money home from anywhere, at any time.
While these advances are changing the lives of migrant workers, FinTech companies are also taking an active role in helping these unbanked populations ease into a new, cashless world by providing sessions and materials that promote inclusion and help educate workers on money management and technology.
FinTech is bringing people across the world the opportunity to gain control of their finances while working abroad and as a result, live better lives. It is also promoting inclusion and opportunities for FinTech companies to take part in something bigger than just technology.
View original content here: https://gomedici.com/fintech-advances-bring-financial-freedom-to-global-workers/
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