There are various means through which money can be transferred across the world including through banks and money transfer applications. Money transfer applications are becoming increasingly popular because people want an easy and fast way to transfer money. The applications provide these options as it removes most of the challenges, paper works, and delays that come with sending money through the bank. However, the major reason why most of these money transfer applications continue to gain traction and remain profitable is easy because of third world countries. Some of the ways through which money transfers business is driven by third world countries are discussed subsequently.
Payment for services
One of the major ways third world countries drive transfers business is through payment for services. The Internet and freelancing activities have resulted in the hiring of people in third world countries by people in developed countries. In most cases, the developed countries have very low unemployment rates and high minimum wages. On the other hand, third income countries have high unemployment rates and low minimum wages. The implication is that they are available to work at a cheaper rate compared to hiring from developed countries. Thus, those who want cheaper labor attempt to find skilled freelance workers that can help with their tasks at a cheaper price. Subsequently, they use apps like transferwise to send their payments to their local bank. You can read more about transferwise to know how to use their services to pay freelancers from third world countries.
Payment for products
While payment for services is often made to workers from third world countries, individuals from third world countries often make payments for products to developed countries. This is considering the lack of industries in third world countries. Business owners and individuals often order for gadgets and other products for reselling or for personal use. When they do this, they also have to make payments to the manufacturer. In most cases, they use the payment feature on the website of the supplier to make payments. In other cases, they send money directly to the seller through money transfer applications and the bank.
Remittances to family
The lack of jobs in third world countries and the search for greener pastures result in a lot of people from third world countries migrating to developed countries. In most cases, they leave behind aged parents or dependent siblings who they have to send money to. Thus, remittance from third world countries by relatives is a major source of revenue inflow from developed countries to developing countries. Most people from third world countries who work in developed countries send money to their relatives monthly.
There are instances where an individual migrating from third world countries to developed countries was sponsored by a third party. On successful migration to the developed country, they would have to send back the money used to sponsor them as well as some interest. This is another reason why money is sent back to third world countries with positive effects on the money transfer business.