Starting one’s own business is already an overwhelming decision, and if you choose to start a Money Transfer Business, it is only going to add oil to the flame. However, experts say that setting up a Money Transfer Business is not a big deal. All you need is to develop is a basic understanding of how things work in the business, and once you explore all the nook and crannies of the entire business system, you can run your money transfer business swiftly and with confidence.
Before moving further, it is important to understand that money transfer is a serious business and there are country laws governing and tracking each transaction. In an attempt to outsmart people or trying to be clever in front of the law, you will land yourself in a pool of troubles. Money is always regulated and governed; and so, it is advisable that you get in touch with the local regulators and attorneys who can help you with the setup.
Understanding the Basics of Money Transfer Business
Rome was not built in a day. So, do not compare your progress with any other players in the market. There are struggles, but you should know how to weather the storm coming your way. Here are some of the points to remember:
1. The business would start with licensing
Before you think of anything else to thrive in your business, the first thing you need to get is the license to start a money transfer business. It is time to search for the right literature to find out how the licensing thing works in your territory. Once you know it, you should go for it.
2. Know the Diaspora
There are different players in the eco-system of a money transfer business. It is important for you to know the diaspora very well. From the sender, sender’s bank, beneficiary, beneficiary’s bank, MTO bank to payment processor, Id verification, agent affiliate and so on.
3. Your first dive in the business
Now when you have the license and the knowledge of all the incumbents of the whole process, it is time for you to put your legs in the water. You can do two things: attend a money transfer conference or find a mentor in this field.
4. Working capital
Whether it is your own start-up or you are considering an affiliate, you will need working capital. Adding the right amount of working capital to the business is very essential, you need to find out ways to do it.
5. Finding your bank
You need to find a bank that will support your money transfer business, and it is not an easy task to find one. There is plenty of de-risking involved and thus, you need to come with a new banking equation.
6. Anti-money laundering and Compliance
People’s finances would be involved when you jump to this business. Money is regulated and tracked whenever it is transferred from one place to another. Where there is money, there are frauds. You need to train yourself in anti-money laundering. Further to this, you will also need a compliance officer on-board with your organization.
7. Choosing the Corridor
The last step would be to determine the kind of corridor you want to work with. If you already have determined your bank/MTO it would be great, but if you haven’t, it is time to tie up with someone very soon.
To reach your goal, you must always have clear hindsight. Pay attention to each transaction and keep learning from each mistake that you commit on the way. As finances are involved, you should ensure that the transfer is happening hassle-free. Create a written copy of your business plan that will always help you throughout your journey.
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