The efficiency and ‘anytime-anywhere’ availability of the digital economy is a well-known and loved facet of the westernworld. We can transfer funds between accounts, deposit checks using our smartphones, and even split the bill at dinnerwith the use of a few emojis. However, experiencing FinTech as a new and exciting frontier is quite different for peoplein numerous countries around the world. For many in developing countries, a cash-based economy is a norm, and digitalbanking is new – if not uncharted – territory.
Today, there are 164 million migrant workers in the world, many of whom leave home in search of incomebecause jobs are unavailable at home or the available jobs don’t pay enough. They usually work long hours to earn incomethat will give their families better lives. An estimated 800 million people worldwide are directly supported by remittances from loved onesabroad. In many cases, those loved ones are unbanked, which adds another layer of complexity. However, advances inFinTech are giving migrant workers greater control over their finances and making it easier to manage, spend, and sharetheir income.
Facing a lack of sustained economic development, political instability, a growing population with double-digitunemployment levels as well as low wages, 2.3 million Filipinos work abroad. The cruise industry has been anattractive 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 thecountry’s gross domestic product – the government requires 80% of every Filipino worker’s base salary to flow back intothe Philippines. It’s easy to see why the country has what many consider to be one of the most organized and centrallycontrolled overseas recruitment processes, which is primarily managed by the Philippines Overseas EmploymentAdministration (POEA).
Historically, managing finances and sending money home while at sea hasn’t always been easy for migrant Filipinoworkers. 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 shopexchange and transfer rates while onboard. Essentially, crew members must spend their hard-earned income to send moneyhome 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 thelimited time at port.
Traditionally, cruise lines have had little ability to streamline delivery of payroll over multiple countries andcurrencies 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 expensivetransactions to send money home.
Each migrant worker has a different story, background, and need. Some send money home for their kids to attend schoolwhile others are just trying to put food on the table. The common link between them all is the need to manage and sendmoney 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 prepaiddebit card and can manage their money from a mobile app that is engineered to function in low-bandwidth technologyenvironments, white-listed onboard, and designed to work when less-than-optimal internet connections are available, nomatter the location. They no longer have to pay internet fees, so it’s easy to send money home from anywhere, at anytime.
While these advances are changing the lives of migrant workers, FinTech companies are also taking an active role inhelping these unbanked populations ease into a new, cashless world by providing sessions and materials that promoteinclusion 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 andas a result, live better lives. It is also promoting inclusion and opportunities for FinTech companies to take part insomething bigger than just technology.
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