The Dynamics of Money Transfer

Money transfer has been the pivot of most countries, especially the developing ones. As a matter of fact, most developing nations will only survive on the support their nationals residing abroad lend them via their remittances to their relations back home. Remittances from foreign nationals—legal or non legal residents in the developed world have been swelling the GDPs of developing nations and also improving the lives of many of the citizenry. Many children, who hither to, wouldn’t have sat within the four walls of the classroom due to the economic incapacity of their parents, have through the support of their relatives far away in Germany, United States, Canada, England, inter alia are now respected professionals in society.

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Remittances boost educational expenditure in recipient households, and they can determine a decisive impact on the long-term dynamics of human capital under favourable assumptions on the wage differential and on migration costs. Under these assumptions, an exogenous probability to migrate represents an equal probability of moving out of the poverty trap that fades away in the long run, as remittances lead all households to converge towards the equilibrium at a high level of human capital (Bertoli, 2007).

Not only have remittances contributed to the advancement of the human capital base of a country, it has also helped in saving a dying soul. In developing countries where child and maternal mortality are roaring like the storm on the sea, remittances from abroad have saved many a sick child or mother. In developing economies, where a chunk of our disposable incomes is spent on food, the remittances from our brothers and sisters domiciled abroad have assisted in taking care of sick people who were on the bridge between life and death. Sadly, most of these sick people or suffering individuals receive these moneys from their relatives living abroad too little too late to the point that the moneys are not able to serve their rightful purpose. And for me, this is the problem: the problem of still relying on the traditional methods of money transfer in this day and age.

Why do people still carry money on themselves when travelling to their countries instead of wiring them through any of the official channels? Why do majority of foreign nationals—especially those from poor countries prefer the unofficial route of money transfer to the official one? Why these risks although the perpetrators are aware of the beneficial impact to the economy if the official routes were utilized? Although, it has been established that the cost element—the price of sending money is the pivotal reason why the formal channel is ignored, one factor that is mostly overlooked or ignored, for my money, is the technological dimension.

Think about the amount of man hours lost when you have to queue for several minutes before you can send money to a dying or hungry relative. These lost hours could have been used productively elsewhere if there was an efficient way of sending money. In this era of technological advancement, where there is efficiency of executing activities and doing business, the era of unnecessary waiting and the formation of long queues should be a thing of the past.

People, who wire moneys to their relatives in the developing parts of the world (Ghana, Nigeria, Kenya, South Africa, India, Pakistan, etc.), should be in a position of doing that by staying at home. I mean there should be a paradigm shift in the transfer of money: the traditional method of sending money should give way to the technological way. This is because it provides the potential customer the luxury of efficiency, convenience, and security. When money is wired to a relative on An ATM card, the safety and security of the money is guaranteed because when the card is lost, the money is not: you only have to block the card from the provider of the card.

This technological dimension, although not common on the market is the hallmark of VoiceCash—a financial institution based in Munich. Their new product—the VoiceCash prepaid twin MasterCard—a technological breakthrough allows remitters to wire money to their relations from one card—a primary card to another card—the secondary (receiver’s card) within seconds. This is transaction in real-time. In the 21st century, this should be the trend the money transfer industry should pursue in order to provide comfort, convenience, and safety to their numerous customers.

The dynamics of money transfer is gradually changing as a result of technological innovations. VoiceCash has indeed shown the way, and remitters should follow them in ensuring improvements in their lives, families, and their nation’s. Currently, remitters in Germany and Austria do it the VoiceCash way—the technologically based way of remitting relations by every Tom, Dick, and Harry in every nook and cranny of this world. Update your knowledge about the most efficient and effective way of money sharing on

God Bless Ghana!!!

By Kingsley Nyarko, PhD, Educational Psychologist, Accra, Ghana