Start your remittance business with RaaS provider
Partnering with a Remittance-as-a-service, or RaaS provider, may be one of the most cost-effective and fastest approaches to start a money transfer service for cross-border payments. What is a RaaS, you ask? Like SaaS and PaaS, RaaS is a service provided by a third party that includes all elements required to start a money transfer business, such as technology, banking, partnerships and compliance.
Faisal Khan describes RaaS as “an all-encompassing solution that allows ISOs (Independent Sales Organizations) and Incumbent MTOs (Money Transfer Operators) alike to offer a managed services to their clients under a white-label offering where all aspects of the regulatory aspects, such as licenses and compliance are covered by the PLH (Principal License Holder) that is sponsoring you for the program.”
When you take this approach to starting your Remittance business, you will get the liberty to operate your own brand as well as provide compliance, banking, payouts, or the technological infrastructure - things that neither DIY or being an agent of the Money Service Business gives you.
A RaaS provider can offer you with three attractive value propositions:
Access to the industry
Remittance is a serious business and it means meeting all the regulatory requirements set by government authorities in charge of money movement. Obtaining a license to transmit money in all the individual states is a time-consuming and expensive process. Similarly obtaining bank accounts and payment processors for cross-border money transactions is very difficult and expensive to maintain. A RaaS provider will typically help you meet these requirements without having to get your own license or bank account which means faster GTM.
Technological and compliance infrastructure
A RaaS provider provides you with a pre-built technological and compliance infrastructure. As a result, it will replace several partnerships and integrations and offer its solution in a single API. You no longer need to exert much effort partnering with banks or tech providers because the RaaS provider will provide you a la carte.
A RaaS provider will enable you to build your application in such as way that you can hyper localize build great user experience of your user need as well as you can provide the first tier of customer service
A RaaS provider will typically have set up partnerships with all the vendors needed for a digitally compliant business. It will have developed all essentials, starting with compliance, banking, FX, payout, and the entire technological stack. You can promote the company yourself and then start bringing in customers.
While you can enter the market with skill, resources are required to establish and expand your business- and resources are very expensive. When you use a Raas provider as your launchpad to enter the market you can avoid the cost of growing your internal team. They will be responsible for managing your relationships with all of your vendors, MSBs, and BFIs, as well as for maintaining the compliance and regulatory environment. Your only objective would be customer acquisition and business growth.
The solution provider will provide you with the majority of the services unless you are using the white-labeled solution. You will simply need a small tech team or development team to create and maintain your websites and mobile applications for enabling a customized user experience.
When all of these expenses are simply converted into a SaaS fee, your time to market decreases significantly. It will allow you to focus on building your brand and acquiring your customers and this is one of their strongest value propositions of a RaaS provider.
Having said that, you will need to make sure that you have some funds to invest in a RaaS provider, but the benefits of partnering with one far outweigh the challenges of building your own system from scratch.
There are only a few players that are providing a launchpad for startups that want to get into the industry, Machnet is one of them. Machnet’s RaaS API program enables companies to integrate cross-border payment capabilities into their products and services, allowing them to kickstart their money transfer business and get ahead of the competition.
If you are eager to learn more on how Machet’s RaaS program can add value to your business, go ahead and shoot us a message .