What are the Pros and Cons of RaaS (Remittance-as-a-Service)?

Hello. My Name is Faisal Khan. I am a banking and a payment consultant.

The question I got today in the email is what are some of the top two pros and cons of remittance as a service. They asked for top five, but I’m going to give you top two at least.

So, let’s talk about the top two cons of, you know, things that are going against you by doing remittance as a service. Number one is that the client does not belong to you. The client belongs legally to the principle license holder, because the deal has been structured as such that you’re having access to the license but the license is not yours. Hence the client legally is not yours. So, all the client data belongs to the principle license holder and because of the state laws or the privacy laws that may be prevalent in that particular state or geography that you may be operating in, you may not have access to them. So, the client legally belongs to the principle license holder but you can get something like marketing data which is just the first name, last name, email maybe even a telephone number and so forth.

The second con is that tomorrow you go get your own licenses. Now when you get your own licenses what are you going to do. You’re going to have to most likely move all these clients over to you. That means re-registration of all those clients in the United States and in Canada passporting of registration is not allowed. That means if a client has already signed up once, one place, they cannot be passported or two. They will have to be reassigned, reregistered, and all of that. So, that’s the second con.

The pros obviously is you don’t have to put up all that money. You don’t have to put up all that money, that’s a huge, huge advantage for start ups, from zero to one startup especially. If your idea of rewards or pertains around the MTL industry, then you know it can be excruciatingly expensive to get all those licenses. So, that’s a huge pro.

The second prong also comes from that is that you don’t have to wait that long. You can get your licenses. You know, I don’t know, typically takes about 8-9-10 months before the first license starts appearing. And, then the big three New York, Texas, California anywhere from a year, one and a half years or even two years. So you don’t have that much time. I mean, you know, who’s going to wait two years to get the big licenses for New York, Texas and California, not to mention put up the money. So, the biggest pro is you start today, you short circuit that time and you don’t have to wait.

So, two pros is that you don’t have to give the money, you start today. Two cons, the client does not belong to you, second is that re-registration needs to be done, if they, if they were to shift over to you. So, those are the two biggest pros and cons of remittance as a service.

If you have any more questions or comments, there is a link below in the description to my comments, to my contact page, and you can contact me through there. I’ve closed off comments over here because of the trolls on YouTube. But I’d be happy to answer if I find a comment from you or a question from. Till next time, have a good one.

This page was last updated on December 10, 2019.

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