Fintech can boost financial inclusion for migrant workers

Three global workers bend over to pick vegetables out of a farm field. They are wearing wide-brimmed hats, gardening gloves, cargo shorts, and flannel shirts.

Like many countries, the Philippines has come to rely on remittances as a vital part of its economy.

For a good number of those workers, the cruise industry has been an attractive option. However, sending money home isn’t always easy. And for a large unbanked population, getting money in the hands of loved ones while working at sea is even more challenging.

If you’ve ever been on a cruise, you know that internet connectivity can be costly and unpredictable as most cruise lines today still rely on direct satellite connections. For migrant workers, those connections are a lifeline home. And, if they don’t have the option or time to disembark and send money home, that connectivity becomes even more important.

At the same time, cruise lines historically have had little ability to streamline delivery of payroll to workers over multiple countries and currencies. They overcame this challenge by paying employees in cash, which was dangerous, high-risk and saddled the employee with the burden of currency exchange and expensive transactions to send money home.

Chart: Top remittance destinations

During time at port, crew members would disembark with cash in search of the closest Western Union or MoneyGram retailer. Carrying cash put them at risk for theft by local criminals who anticipated the opportunity knowing the cruise ships were in port and employees were walking around with cash that they had just been paid.

Crew members fortunate enough to get paid electronically often bear the cost for non-essential internet usage onboard, so it’s still expensive and time-consuming to price-shop exchange and transfer rates. Essentially, they must spend their hard-earned income just to send money to family. An extra dollar spent for a transfer might be the difference between a meal for their families.

Advances in fintech and the widespread adoption of mobile can meet the needs of migrant workers.

This is especially evident in the cruise industry where workers are paid via direct deposit on a prepaid debit card and can manage their money from a mobile app that is engineered to function in low-bandwidth technology environments. Workers no longer have to pay internet fees, so it’s easy to send money home from anywhere at any time with a few simple clicks in a mobile app, just minutes after getting paid.

Family members can then pick up the money minutes after the crew member sends it, and in and in cash if preferred.

This is just one of many examples that illustrates the impact fintech innovation has had on remittances and as a result, economies across the world.

And although technology is the driver, remittance has also created opportunities for financial inclusion, empowerment and control among migrant workers. It’s also encouraged fintech companies to step up and help educate unbanked populations on money management and ease into using technology to manage their finances.

For many, the transition from a cash-based economy to a digital one can be overwhelming. Fintech companies should take responsibility for helping people who are unaccustomed to digital money management understand technology, how it works and how to use it to gain control of their finances safely and responsibly. Through the efforts of those fintech companies that are willing to step up and help, financial freedom can be accessible and easy for everyone, regardless of geographic location.

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