Where does the money for transfer payments come from?

It depends: It is either pre-funded, i.e. arrangements are made to have enough money on the other side, so that when a payment is made, the money is taken out of the available balance and paid for. The other arrangement is credit (which has a counter party risk factor higher than the pre-funded one). In both cases, […]

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How does money flow physically in remittances?

It doesn’t! (unless of-course you are operating a 100% cash only money transfer network – an example of which I do not know of). To understand how cash is transferred between countries, read this answer: Faisal Khan’s answer to Where do currency exchanges get their currency? To understand how money transfer works between countries, including remittances, […]

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What is the average monthly revenue that an independent sales organization (ISO) is expected to bring in for a small and medium-sized principal license holder? What are the average commission rates earned by an ISO? Is it a flat fee?

This depends on the corridor and the margins on the corridor. Typically, a PLH (Principal License Holder) will be raking in about 20–25 basis points, and would a minimum. So for every $1 Million processed, the PLH takes about $ 2,000 in income. Anything above and beyond is the pricing set by the ISO (typically […]

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What do you think about an Uber model for remittance? An app where money senders in opposite direction get matched and do local money exchange. The exchange is insured against default by digital assets on the blockchain.

What you are describing is some I wrote a paper on way back, called the Uberization of Money Transfer. (Read here: The Uberization of Money Transfer – Faisal Khan). Let’s start with the basic notion. Yes, it seems logical that independent PLHs (Principal License Holders) would benefit from a grand alliance of sorts. Think about how Oyo Hotels, AirBnB, […]

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