With the development of blockchain technology, we see a sudden improvement in remittance prices and speed, as the companies try to survive on the money transfer market…
According to the data from Wirly.com, which specializes in gathering information about remittance companies and money transfer services, you can easily send $1000 abroad for less than $5. It’s quite a bargain, considering the $15-$30 you would have to pay in a mainstream bank. International transfers have long time ago become too expensive to conduct them via regular bank network. Some banks even charge you just for receiving money from abroad.
Independent online remittance platforms tend to offer cheaper services, because of their own partnerships and established networks. A person sends them money via a regular domestic free wire and they take care of moving this money between borders. There are companies such as Western Union, which have branches and locations in almost every country. That way it’s possible for your recipient to pick up money just after a few minutes. All Western Union does is contact their foreign branch to confirm the amount.
Cryptocurrency transfer costs
Now, remittance companies face a dangerous price-wise competition in the form of blockchain technology and cryptocurrencies powered by it. Using these new digital coins you can transfer hundreds of thousands of dollars for a few cents in total. Moreover, your recipient will receive it in less than a minute.
However, at this point, there are numerous obstacles, which prevent a potential worldwide migration to crypto-based transfers. The value of these coins is not stable yet, as the market is relatively very young. Moreover, there are no official regulations or any kind of government acceptance.
Future of remittance market
Yet, there are already thousands of crypto transactions being conducted via blockchain each day. It shows that the technology works and there are people who seek these secure, fast and cheap transactions. That’s why old-school remittance services are already researching ways to improve their offer. They know that once the crypto situation clarifies, no one will wait 3 days for a money transfer which costs $5. Some companies are already trying to utilize blockchain in the mainstream financial services. Maybe soon we will be able to send regular bank wire through blockchain? Maybe then, an international bank transfer could cost $0.1 and be delivered within 30 seconds…
Some platforms, which already connected this technology to their services, claim that they are able to provide remittance services in a more remote regions. Moreover, such transfers can be processed within a couple of minutes and the prices are significantly lower than before. However, they still can’t achieve the rates of cryptocurrencies transfers, but as crypto is not fully reliable yet, maybe it’s a good alternative?