What Technologies Do Money Transfer Services Use?

The online money transfer sector is growing as more people use these services and businesses enter the space. Because they handle a lot of sensitive personal and financial information, they are a ripe target for malicious actors who won’t stop at anything to gain access to this data. 

For this reason, money transfer platforms leverage various technologies to ensure secure, fast, and reliable transactions. This article provides a high-level overview of these technologies.

Encryption

Encryption is crucial for ensuring secure data transfers between a browser or app and a server. It uses mathematical algorithms and keys to obfuscate data so that it is unreadable or unusable unless the party accessing it has the right keys or credentials.

Money transfer apps use strong encryption protocols, such as SSL/TLS (Secure Sockets Layer/Transport Layer Security), to protect users’ financial information and prevent unauthorized access. 

Two-factor Authentication

Using a password alone is no longer enough to secure online and other accounts. Security experts recommend that users use two-factor authentication to secure their accounts, including online money transfer accounts. 

Two-factor authentication uses something a user knows (password), something they own, such as a phone to generate or receive passwords and passcodes, and biometrics like fingerprints to secure accounts.

Most accounts require only two options, but some might require all three depending on how secure they want to be.

Real-time Payment Systems

A major advantage of using these services to send money online is that their transactions often complete faster than those of other options like bank accounts. They do this by connecting to and integrating with real-time payment systems that ensure smooth and successful transfers, whether the person is sending money abroad or domestically.

Cloud Computing

Cloud computing has grown as more businesses and individuals realize its benefits. Cloud computing and infrastructure help money transfer services to scale their services, store data securely, and offer high service availability to users across different devices and locations.

Digital Identity Verification

Fraud is a serious issue wherever money and personal information are involved. Online money transfer services use Know Your Customer (KYC) to ensure customers signing up and using their services are who they say they are. They also use anti-money laundering systems to ensure compliance with local regulations and that malicious actors do not use their services and platforms for nefarious purposes. 

Artificial Intelligence and Money Laundering

Artificial intelligence (AI) and machine learning are excellent for detecting patterns and anomalies. For this reason, money transfer apps often leverage AI and machine learning algorithms to detect and prevent fraudulent activities. 

These technologies analyze user behavior, transaction patterns, and other data to identify suspicious activities in real time. By doing this, they help protect their users and themselves from malicious actors and their activities.

Near Field Communication (NFC)

NFC allows contactless communication and data transfer between devices. It is an excellent option for money transfer apps that can use it to facilitate in-person transactions by tapping the mobile device on a payment terminal.

Online money transfer platforms and services use various technologies to keep users and data safe and facilitate reliable and fast transfers. They use the technologies above in combination to enable all this.