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Money Transfer Systems

Modern money transfer systems allow for fast, secure, and reliable transfer of funds without physical movement of cash. Common modern methods include bank transfers, wire transfers, electronic funds transfers, and email money transfers. These systems facilitate international commerce and economic activity through purchase of goods, services, and bill payments. While providing advantages of speed, flexibility, security over traditional cash or check methods, modern systems also face ongoing challenges around computer reliability and security issues.

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365 views

Money Transfer Systems

Modern money transfer systems allow for fast, secure, and reliable transfer of funds without physical movement of cash. Common modern methods include bank transfers, wire transfers, electronic funds transfers, and email money transfers. These systems facilitate international commerce and economic activity through purchase of goods, services, and bill payments. While providing advantages of speed, flexibility, security over traditional cash or check methods, modern systems also face ongoing challenges around computer reliability and security issues.

Uploaded by

MainSq
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Modern money transfer systems

Introduction

Money is an essential tool in our day to day lives and as a consequence, efficient ways of getting
it from point to another are also an essential part of life as well. The systems should fast, secure
and also guarantee the client that the money will certainly get to the intended destination

Over the years, various ways of transferring money were used but none are more secure and
faster than the modern money transfer systems. Most of the modern money transfer entails
non-cash transfers i.e. there is no physical movement of money from one point to another. Of
the current systems, the most common include use of banks to make account to account
money transfers, use of wire transfers, electronic funds transfers, and email money transfers.

Modern money transfer

In Europe and other well developed economies, money transfer systems such as the bank
transfers are the most common form of payment. Therefore, money transfer is an essential tool
in that it facilitates purchase of goods and services, payment of bill etc. through the use of debit
and credit cards, the velocity/ speed of money in the economy is enhanced.

The evolution of money transfer systems reached its peak with the introduction of internet
currency. This allowed purchase and sale of commodities and services over the internet. With
this, there was a need for some form of banks to facilitate the payment and receipt of money
over the internet without utilizing the services of conventional banking systems. These
“internet banks” have grown over the years and the fact that they can actually be linked to
client’s bank accounts has made their popularity grow over the years.

The latest innovative way of transferring is the use of mobile phones. This was the brain child of
Safaricom, a Kenyan mobile phone service provider. The service known as MPESA helps in
transfer of money and is quite helpful to the un-bankable in the society as it only uses one’s
card and other national identification documentation to use. One does not have to have an
account of some form with the banking institutions as is the requirement with most other
money transfer systems. The service is slowly catching up in other parts of the World.

Cost of money transfer

The money transfer service providers usually charge certain fees depending on the quantity of
money as well as the distance of money transfer. Money transfers across boarders are usually
subject to higher commissions/ charges. To facilitate money transfers to different locations in
the World, these money transfer agencies have to have offices, agents or representatives
strategically placed to maximize business returns and good service delivery.
Advantages of modern money transfer systems

i. This form of the transfer is fast compared to the distance that is covered, other
alternatives like cheques takes a longer time compared to this.
ii. The transfer is more flexible and one can easily move money from one bank to another
or even from one country to another without following long procedures.
iii. This transfer is more secure considering there is no money in cash-form; it just needs
use of passwords and security checks that only the involved parties are well informed.
iv. This mode of money transfer promotes foreign currency exchange as the sender sends
in their own domestic currencies which are later converted in to the other currency
depending on the rate of currency exchange.

Disadvantages of modern money transfer systems

I. Due to use of computer systems in most of modern money transfer systems, trust
and reliability issues are a constant threat.

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