The Pandemic-Driven Adoption Of Digitized Remittances For Singapore’s Foreign Workers

Migrant workers power the economies of their host and home countries, performing vital jobs abroad and sending vast portions of their earnings back to loved ones.

This is especially true for Singapore, where foreign hires are estimated to make up more than 20 percent of the population, with the majority being low-wage workers looking for higher salaries to support their families back home.

These laborers come from countries like Bangladesh and India, with many finding employment in construction, domestic services, shipping and manufacturing. The Ministry of Manpower (MOM) — Singapore’s labor policy agency — estimated in December 2019 that there were 1.43 million documented foreign workers in the country, including 261,800 in domestic services and 370,100 in construction.

This population represents a sizable source of remittances as well, according to Sam Tay, CEO of FinTech Aptiv8, which offers a support app for foreign workers in partnership with MOM.

“Every month when they are being paid by their [employers] … the majority of that money would be remitted back to their families in their hometowns, in their own countries — and they’d just retain maybe a couple hundred [dollars] of their disposable income in Singapore for their daily food and necessities,” Tay said.

Tay told PYMNTS in an interview that it has become important to add remittance capabilities to the foreign workers’ app, which the company is achieving in partnership with Banking-as-a-Service (BaaS) provider Nium and its Remittance-as-a-Service (RaaS) platform. The latter’s Singapore country head, Ho Chee Wai, joined Tay in discussing Nium’s collaboration on the project and what it takes to securely enable these cross-border payment flows.

How The Pandemic Made Remittances Mobile

Global health concerns have overturned foreign workers’ usual approaches to sending remittances, Tay and Chee Wai said. These laborers would often visit agents in person with cash in hand, but efforts to contain the virus have steeply curbed this. Many migrant laborers live in dormitories, and Singapore’s government has responded to risk of contagion by prohibiting many workers from leaving the premises. The government ordered 180,000 foreign construction hires to stay in their dorm buildings in April and told inhabitants of 25 buildings to stay in their rooms.

“Traditionally, these workers are a very insecure audience, which means they prefer bringing cash to a remittance counter and asking them to remit the money directly,” Tay said. “This pandemic changes that because they are now not able to get out of their dormitories; they are not able to go to the remittance center to remit the money. The only option that has been open to them over the past couple of months is to do it digitally.”

This newfound dependence on digital remittance tools could forge long-lasting habits, Tay added.

“I strongly believe this pandemic will create a new norm for this audience,” he said. “They have become very accustomed to using mobile apps and digital solutions for their daily necessities and daily lives, including remittances.”

Tay and Chee Wai said they hope users will see apps’ remittance capabilities as safer, more convenient and desirable ways to send funds going forward, and not just view them as temporary fixes when no other options are available. The digital natures of the services enable 24/7 money transmission from any location, and Aptiv8’s collaboration with Nium has the potential to add more features in the future, such as online shopping, that will further enrich the use-cases for the migrant workers. This could also open up a new customer base for digital financial services like payment cards and eWallets.

“You’d think Banking-as-a-Service is for white-collar [professionals,] but no,” Chee Wai said. “Banking-as-a-Service can really be revolutionized. … You can have remittance as a first step and subsequently allow [the issuing of] debit cards for migrant workers and they can use [an app] to do their eCommerce shopping — the possibilities are really amazing.”

Leveraging Technology And Government Data To Simplify Due Diligence

Achieving these policies and rolling out services requires carefully attending to all potential security concerns, however. Aptiv8 and Nium must ensure that the remittance services will be in compliance with Singapore’s anti-money laundering (AML) and know your customer (KYC) laws without allowing the due diligence measures to introduce friction into user experiences. Providing quick, digital KYC services can help.

Migrant workers in Singapore already provide the government with biometric data and receive identity numbers linked to these details, Tay said. The app can leverage the vetting work the government has already done in its fully digital KYC process, with app users photographing their official work passes and taking selfies to help verify their identities, Chee Wai noted.

Foreign workers provide vital labor power to their host countries and act as critical financial lifelines for families back home. The pandemic has made living and working more difficult, disrupting everything from how workers conduct their daily lives to how they are able to access and send remittances. Secure digital tools could help solution providers gain long-term customers and provide much-needed convenience and well-designed offerings to consumers who may not have known there was an easier way.