As soon as you look at the payment processing options available online, another one pops up. While some such as PayPal have been around for the long haul, there are other, newer online money transfer services that seem to be just as widely used. If you are going to put your online MS finance degree to work and plan to build an online money transfer service from scratch, here’s what you need to know.
The Difference between Online Money Transfer Services and Banks
Whether you give users the option to load money to their online accounts or virtual ‘wallets’, you need to let them know upfront that your company is not a bank in any shape or form. There are international laws that dictate what kinds of services banks can offer, including regulations on deposits, identify verification, and money transfers. Professionals working in online finance know that transferring money to and from certain countries is a bit harder than others are, thus making the idea of starting a new online money transfer platform more appealing.
How to Get Consumers to Try Your Services
After you have the correct licensing and a great website that enables users to register their own accounts, you will want to get your first customers. The problem is that with so many choices available, few are going to want to experiment with a new online money-transferring platform unless you offer something that others don’t provide. For instance, you may be able to get licensing in a particular nation and offer same day money transfers that aren’t available on other, more well-known, payment processing websites. On the other hand, you could also waive transfer fees for a limited time, provided you are able to eat those expenses.
Guarantees and Financial Backing
The biggest problem involved with launching an online money transferring service is raising capital initially. While you will essentially just be moving money from one user to another, you can’t depend on deposits alone to keep your company in the black. Anyone with an online finance masters degree will tell you the potential of fraud is quite high until all of the kinks are worked out of the system, so you will need money on the books to ensure that all of your customers can complete their transactions and feel confident about your services. To begin with, investors will want to see your entire vision, know what the difference between your money transfer platform and more established companies are, and be confident that the chances of seeing a profit are high.
There’s still room for new online money transferring websites, as users don’t mind putting their money where it can be used and transferred quickly. If you have mobile money transferring capabilities, your company might end up being as convenient to use as cash. As long as you can explain the purpose of launching a new money transfer service that has features not seen anywhere else, there will be few detractors and plenty of interested customers.