How To Start a Money Transfer Business?

This page was last updated on 7 Feb 2021.

How to Start a Money Transfer Business

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Faisal Khan, LLC

Introduction

Money-Transfer or Remittance business seems to be the low-hanging fruit for many who want to enter this space. The largest cross-section of people who want to start money transfer business will most likely be working diaspora in other countries who have sent money back to their home country and see a market (read: business) to be made.

On the other end of the spectrum are startups, who usually also have some form of an association with the diaspora with either one of the founders being a disapora or their interaction with them.

In the payments space, we usually say, the lowest rung on the payments ladder is the person to person (P2P) money transfer market, i.e. remittances. It is seemingly the easiest business to enter into.

This one-page hopes to educate you on all you need to learn to start your own money transfer business. For an added benefit, I’ve also included a Glossary at the end of this page.

Before You Get Started

A fair warning. Like other businesses, the money transfer business looks seemingly very easy, but it is anything but simple. The movement of money across the world is a regulated practice. This means, that you need licenses and be in compliance with the various rules and regulations (city-wide, nation-wide, region-wide and world-wide) that you have to adhere to.

In most cases, folks who are starting out in the money transfer business, underestimate the amount of work required in amassing clients and even more so, the amount of work required that goes towards maintaining your licenses and being compliant with all the regulations.

However, the most serious advice to be dispensed is that of money. Very few will actually succeed in making money in the first year. This is a competitive business. One with cut-throat competition. It is a very fair assumption that the capital you will inject towards the first year of business, would be a sunk cost.

Do NOT do this business if …

Do not do this business if you are going to…

Especially do not do this business if you haven’t spent the time learning about it. I see so many people drive into the deep end without understanding the nuances of the business. The only thing they are setting themselves up for is failure. Don’t be that person.

Invest time in time in learning about the business. The opportunity is not going to go anywhere. So do not pay attention to those who will tell you, it is now or never.

How To Start a Money Transfer Business

Now that we have the intro and the warnings out of the way. Let us discuss how to start a money transfer business. The first thing you will struggle with is nomenclature, the lingua franca of the business, the taxonomy. Fear not. This is natural. Once you have learned how to start a remittance business, all these terminologies would be at the tip of your tongue. There is no shortcut to learning this. As you go along, you will learn the various terminologies and acronoymns.

What type of a Money Transfer Business will you be?

The monst important aspect when starting out an a money transfer business is to understand your options. What would your status be?

In order of the loweest priority to the highest, here are your options:

Glossary

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