International Money Transfer will cost few cents? Soon it may be possible…
We live in the age of globalisation and widely-available connection to the Internet. It’s nothing too unusual to purchase good and services from foreign companies. We run business from our flats and hire employees all over the world. And most importantly, we constantly exchange and send money online. If you have ever wanted to make a larger international transfer you noticed how high the fees could be.
Fortunately, with new technological solutions we may soon be able to send money for a few cents. Moreover, our recipient will receive it after just a few seconds.
Current remittance prices
While banks charge sometimes from $10-$30 for an international wire, online remittance companies have a more appealing rates. You can easily send and exchange a thousand dollars for under $5. It’s very easy to do and convenient. All you have to do is send a regular domestic free bank or card transfer to one of the remittance companies and then they will take care of moving your money between borders.
Blockchain impact on remittance
In last few months there have been a lot of news about cryptocurrencies such as Bitcoin, Litecoin or Ethereum. These topics were hot mostly because of the incredible and sudden value gains of these virtual digital coins. If you don’t know too much about them – they work just like any other currency. However, they are purely digital. Moreover, there are no “central banks” or other “admins” of the system. So only you have access to your e-wallet.
There are still lots of obstacles, which prevent any potential wider adaptation of these coins. However, some online stores already accept them among other payment methods. The biggest advantages of cryptocurrencies are cheap fees and quick transfer delivery times. Let’s take a look at the 2nd most popular crypto – Ethereum. It costs $0.2 to send any amount to anywhere in the world. Moreover, your recipient gets the money to his personal wallet just after 15 seconds.
Now, some remittance companies try to utilize blockchain technology to lower their transfer prices.
Better money transfer services
Some of the companies claim that after connecting blockchain solutions to their platforms, they were able to offer their money transfer services in more remote countries. For example, TransferGo started their cooperation with blockchain and cryptocurrency-related project – Ripple.
The CEO of TransferGo said that: “After launching our Ripple corridor to India, we were able to pay out remittances in minutes, Ripple gives us a competitive edge in India, which is the largest global cross-border remittance market, and today we’re moving more than a couple of million pounds per year.”
Ripple tries to help financial institutions benefit from this new technology. Currently most of the banks communicate via SWIFT network (that’s why the international wire is so expensive). As more and more companies decide to try blockchain and for example Ripple’s network, they will be able to lower the prices and increase the speed. In the same interview TransferGo’s CEO talked about how transfer which takes a few minutes is already becoming too outdated for the modern money transfer market.
Which remit platform is the best?
As even big mainstream financial institutions such as Santander Bank decided to try utilizing blockchain technology, maybe it is the future of remittance and inter-bank communication? We can already see the difference in fees and charges offered by classic remittance companies versus the ones which are not afraid of trying new solutions. Even Facebook is soon introducing their own blockchain-based digital coin. You can read about how Libra can empower financially less-developed regions and bring cheap and almost instant money transfers. All you will need to send thousands of dollars to anyone in the world for few cents is a smartphone with Internet connection…