A remittance-dependent economy like Lebanon is seeing more and more increase in money flowing into its economy every year. Now that we are facing an unprecedented economic crisis, with more than a 90% depreciation of the Lebanese pound, the US dollar continues to be short in supply in the market.
The Lebanese diaspora, more than ever, has stretched out a helping hand to strengthen the lifeline many Lebanese citizens count on. At the same time, banks are still busy trying to find a way to recover, resorting to more liquidity restriction policies and practices that make the money transfer procedure even more complex and less trustworthy, forcing expats to look for creative and new methods for sending money to Lebanon.
You may ask yourselves how complicated it is or what might affect a cross-border transfer? There are at least 3 important factors to consider when sending money to Lebanon to friends and family.
1. High FX Fees – Hidden Fees
The cost of receiving money in Lebanon is fairly higher than in many other countries with an extra cost of 2% endured by the beneficiary and imposed by traditional money agents. To put things into perspective, we rank fifth among the most expensive countries to send money to. According to the World Bank, the average cost for sending money to Lebanon stands at 10.85%, whereas the global average worldwide is around 6.5%. The UN is lobbying that by 2030 the number be reduced to 3%.
As a sender, be fully aware of hidden fees (translating into FX margins), on top of the transaction fee charged. Some providers do not communicate or clearly disclose the total cost. Ask the provider to show you upfront the total fees you pay when sending money to Lebanon.
You need to search for exchange rate margins that match the mid-market rate (easy to find on Google by typing the currency pair you are exposed to, for example “EURUSD rate”) and ask your provider if you are getting the real-time exchange rate.
Also, ensure the beneficiary receives the funds in full and in the desired transfer currency. In that way, you don’t have to worry about fluctuations in exchange rates. Ask about the beneficiaries’ fees to know what will be the exact amount received.
The fees of sending money to Lebanon through banks or online money transfer agents vary depending on the amounts being sent and the provider you’re sending through.
Finally, calculate and assess if the amount you are sending is better off with a flat fee rate or percentage rate.
2. Current Traditional Options and their Drawbacks
We can’t help but notice that the remittance and money transfer inflows to Lebanon have steadily increased over the past years, placing Lebanon in the top 25 inward remittance countries worldwide. This is pushing more local and international remittance players to jump in to ride the wave and others to step up their game.
Determining how to send money to Lebanon is easier when understanding the various options available:
a. Wire Transfers
Wire transfers or bank-to-bank transactions are a form of electronic money transfer method via a network of local or international banks. Transfers channeled internationally through banks have been there for a long time. That being said, more and more banks abroad are no longer allowing to wire money to banks here in Lebanon.
Drawbacks
- Requirement of bank accounts for both sender and receiver
- Slow speed of transfer due to bank clearing policies: up to 5 days
- Non-reversible
- High fees and hidden fees are applicable: sending bank fees, intermediary bank fees, swift fees, receiving bank fees, limited cash out
b. Online Money Transfers
Online money transfers to Lebanon have been available for many years, and have been evolving ever since. Senders and receivers do not require bank accounts to make the transaction and is done electronically through money transfer companies worldwide and local. Some international companies either have operations in Lebanon or are partnered with local agents here.
Drawbacks
- Over the counter queues
- System outages and poor internet connections slowing down transaction processing
- Inconsistency in opening hours and lack of 24/7 availability
- Discrepancies in reference numbers and contact information
- Repetitively handing information and ID
c. Traveling Expats
One way to send money to Lebanon is by moving physical money with people flying to Lebanon. Expats have been bringing money to Lebanon by themselves through their friends and family traveling to Lebanon.
Drawbacks
- Airports limit policies on cash-in-hand
- Possible loss or robbery
- Bounded to occasional visits
Hidden fees, exchange rates, transfer speed, amount limitations, and the safety and security of the transfer vary between each option. When choosing a provider, it’s better not to look only at the rates; choose carefully and look diligently at the service levels and support.
3. Digital Remittance is the New Way
In brief, digital remittances allow people to send and receive remittances at their convenience and own time. Senders are now able to transfer money with just a few clicks from their mobile phones whenever and wherever they want.
Fast forward to the second half of 2022, Lebanese expats are still expecting the remittance scene to be revolutionized and go entirely digital to match what some international platforms offer.
This is where we at Purpl jump in. Purpl is leading the digital remittance revolution in Lebanon and offers a new creative way to receive money in Lebanon.
We developed our product to empower the diaspora connection with their home country by democratizing cross-border money transfer flows to Lebanon and enabling financial access to all.
What makes Purpl more advantageous than other remittance channels?
Lower fees
Your loved ones will receive the funds fully and in USD. They will also be able to cash out the full amount with zero cash out fees.
On the other hand, Purpl with its extensive partner network, offers the senders unbeatable rates up to twice less-costly than your usual money transfer companies. Together, we can say no to excessively high fees.
Safe and Secure
At Purpl, we certainly take safety and security as a top priority. User information, transaction history, and incoming transactions are completely secure and encrypted.
Convenience
With Purpl, users can cash out anywhere at any time. We will have more than 800+ points of cash-outs, including 190+ ATMs, covering the whole Lebanese territory, thus enabling a 24/7 cash-out option for beneficiaries.
A Full Digital Experience
Purpl is easy as 1,2,3. One easy sign-up on the app, and that’s it. Users can also browse the in-app geolocator map to see the nearest location to cash out funds—no need to roam the streets to find a cash-out place. By adopting a digital experience, Purpl saves time, decreases cost, and improves the user experience.
Beneficiaries can receive money from anywhere in the world to their pocket in a fast and seamless transfer and can also manage funds and review transaction history.
At Purpl, we are changing the way we send, receive, and spend money in Lebanon.
We invite you to join the digital revolution with Purpl and wave goodbye to outdated and traditional cross-border transfer channels.
Written by: Ahmad Haidar
