According to GoAbroad, there are 4.5 million students in the world currently studying abroad, 65% of whom are from developing countries relocating to developed ones with the hope for better education. This number implies huge demand in sending money overseas to cover up the living expenses in those first-class countries. Also, according to surveys, financial support is a critical aspect of foreign education and one of the main pressures for international students. Due to these reasons, making cross-border money transfers more accessible and less costly for international students is ripe for change.Problems of using banking services when studying abroad
Bank account abroad has its flaws
Remittances for tuition, boarding and many other expenditures are vital to a foreign student because it’s the main financial support they can rely on. And the only way to receive money from home safely and constantly is to have a bank account abroad. In the most convenient scenario, non-tech-savvy parents will send a huge sum of money at once and let their children decide on budget allocation. Is it actually convenient as it seems? It isn’t, considering the transaction fee and time-consuming procedure of the traditional money transfer via banks or money transfer organizations.
Behind the scenes of the banking system are a lot of human’s manual processes, the costs of sending money abroad as well as the amount of time to handle one transaction’s paperwork; therefore, are usually piled up.
Take money transfer from Vietnam to the U.S. for example. Parents have to wait in lines of people for their turn at a major bank, just to fill in required forms and then again, wait for the bank clerk to process the papers manually. If these papers are correct, parents have to pay around 5%, which means for every $3,000 they send, they will lose $150. This can translate into astronomical budget for any 4-year college term.
In a worse case, if there were errors in those paper work, whether parents or the bank clerk fills in the wrong information for example, the whole process and procedures need to be redone, so it will take you even more days and cost even more than that already-high 5% transaction fee just to finish a transaction.
Debit/Credit cards cannot address the problem
Another way to manage students’ budget more effectively is registering a debit/credit card in the home country. Parents will top up a specific amount of money each month in advance or pay later according to bank’s credit report. Again, it sounds cost-effective at first, but the truth is that for every transaction, the exchange rate and spread between currencies will be added up to the cost. This may be trivial in each separate transaction, but for around 30 transactions per international student per month on average, according to the Guardian, the extra cost would be exorbitant.
Alternatives are still inaccessible
These above problems could be addressed by alternatives. However, the majority of parents are not familiar with such alternatives as MTOs (money transfer organizations) or online banking procedures so that they need to transfer money directly at the bank’s counter, which might waste them unnecessary shoe leather costs. Considering the limited coverage of banks in the remote areas, parents living here even have to face more difficulties sending money abroad.International students and their parents need a better, cheaper and easier money exchange system
ZeroBank, a new-age tech-backed money transfer and exchange ecosystem with blockchain technology, smart contracts and an integrated sharing economy model offers international students a much more convenient and effortless way of sending and receiving money abroad.
Via ZeroBank’s platform, students can receive money sent from home more quickly, directly, at any time, anywhere they want through a network of community agents. Thanks to blockchain and smart contracts, ZeroBank allows everyone to easily make a transaction without having to worry about intermediary fees.
As these costs are minimized and the transaction steps are simplified, ZeroBank not only helps lighten the financial burden for international students as well as their family but also makes cross-border transactions a no-brainer task for everyone including those without cryptocurrency knowledge.