Karen Chan

Regional Manager - Southeast Asia

Blog | 4 min read

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For decades, money transfers received from people working abroad have acted as lifelines of development for many emerging nations. Given their impact, the socioeconomic benefits of MSBs (money service businesses) have been widely acknowledged. Typically, MSBs permit their customers to transfer money, and exchange currencies or cash cheques without needing to rely on bank accounts.

Broadly, MSBs can include corporate entities and individuals who provide either of the above services or a combination of the same. One of the main services that differentiate some MSBs from other enterprises is the offering of international remittances.

Regardless of the service being offered, all MSBs must comply with various regulations in diverse geographies to ensure the operations are fully compliant and within the legal guard rails. The same is true for MSBs in the APAC region.

Keeping this in mind, here are some guidelines for MSBs in APAC for adhering to local laws:

Ensure compliance with regulations:

MSBs in APAC must comply with strict regulatory requirements to operate legally. In countries such as Singapore, Indonesia, and the Philippines, MSBs are subject to supervision by the Monetary Authority of Singapore, Bank Indonesia, and The Bangko Sentral ng Pilipinas, respectively. It is crucial to understand and comply with regulations related to anti-money laundering (AML), countering the financing of terrorism (CFT), and know-your-customer (KYC) requirements. Non-compliance can result in severe consequences, such as fines and even criminal charges.

Invest in technology:

According to a report by Frost & Sullivan, the Asia-Pacific MSB market is projected to reach US$500 billion by 2025, driven by the increased adoption of digital payments and the rise of fintech. Investing in the right technology can let MSBs provide better customer experiences and minimise the risk of fraud. Examples of technology that MSBs can use include online and mobile payment systems, blockchain, and artificial intelligence (AI).

Develop strategic partnerships:

A report by Ernst & Young states that collaboration with banks, fintech, and other industry players can help MSBs in APAC grow their businesses and tap into new markets. Building strategic partnerships can provide MSBs with access to funding, better exchange rates, and allied services that can facilitate their growth. Partnerships can also increase credibility and help MSBs gain the trust of customers.

Offer value-added services:

To stay competitive, MSBs in APAC should look to offer value-added services beyond traditional money transfers. According to a report by McKinsey, MSBs can consider offering microloans, savings products, insurance, and investment services. This could include currency exchange, prepaid cards, bill payment services, and other financial products.

Focus on customer experience:

Providing excellent customer service is essential for MSBs to retain and attract customers. A report by Accenture suggests that MSBs in APAC can improve customer experience by personalizing their services, offering multiple channels for customers to reach out to the business, such as phone, email, or social media, and providing fast and efficient customer support. Additionally, offering competitive exchange rates and low fees can help enhance customer experiences.

In conclusion, TerraPay can play a significant role in driving the growth of MSBs in APAC by providing them with a fast, secure, and cost-effective way to transfer funds globally while ensuring access to a far-reaching global network of partners, and promoting robust compliance.