Can I Negotiate the Rates Offered by My Remittance-as-a-Service (RaaS) Provider?

Unfortunately, when you initially start using the services of a Remittance-as-a-Service (RaaS) provider, you cannot negotiate the rates they offer. This is because the RaaS operates under a specific business model that involves a program manager. The program manager is a key entity that collaborates with the sponsor bank to develop this service. This collaboration often takes months or even years, focusing on crafting a viable business opportunity for program operators, such as fintechs and startups.

As a program operator, or customer, of a RaaS provider, you might wonder why you can’t directly negotiate rates with the sponsoring bank. The reason is straightforward: the bank’s primary interest lies in their relationship with the program manager, not individual program operators. The program manager brings clients to the bank and has already negotiated rates based on market conditions, ensuring they are suitable for selling to customers like you.

Your relationship is with the RaaS provider, not directly with the sponsoring bank. While the bank may approve of your participation, they do not have a direct relationship with you. This arrangement is reflected in your contract with the RaaS provider, who, in turn, has a separate agreement with the bank.

The program manager dedicates significant effort to establish various components like compliance, business development, technology, licensing, identity and funds monitoring, legal contracts, and customer and technical support procedures. These elements are then packaged into the service you use.

If, after some time (typically around six months) of using the RaaS service, you have demonstrated substantial transaction volumes and business growth, you may then have the opportunity to renegotiate rates. At this stage, your business would have garnered enough attention to potentially warrant revised terms. However, this renegotiation is only possible through continued collaboration with your RaaS provider and the program manager, not directly with the bank.

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This page was last updated on January 17, 2024.

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