Where Does Blockchain Stand in the International Remittance Market?

Data shows that the international remittance market is huge. In 2016, migrants living in different parts of the world transferred more than $570 billion USD to their home countries. Even though several FinTech overseas money transfer companies have made their presence felt in recent times, the field is still dominated by three of the original players – MoneyGram, Western Union, and Ria. Between them, they account for around 25 percent of the total market share.

What Has FinTech Done?

Unlike the scenario a couple of decades ago, individuals no longer have to rely on banks or a limited number of high street forex brokers to send money overseas. This is because of the arrival of a number of FinTech companies such as OFX, TorFX, HiFX, Currencies Direct, WorldRemit, and TransferWise. Their growth is apparent too. For instance, TransferWise became the first FinTech unicorn – valued at over $1 billion USD – from this realm to achieve profitability. It achieved this within five years of beginning operations.

So far, FinTech companies have multiple factors working in their favor. While they have managed to reduce the cost of cross-border fund transfers, they have made the process quicker too. In addition, some of the FinTech companies give their customers different transfer and payment methods from which to choose.

What Has Blockchain Done?

Blockchain technology appears to be making slow but steady inroads into the international remittance market. In early 2018, MoneyGram became the first overseas money transfer company to announce the use of Ripple’s blockchain technology on a trial basis. Western Union followed suit soon after.

In mid-20188, Singapore-based InstaReM teamed up with Brazil-based BeeTech with the aim of making fund transfers between South America and Asia-Pacific faster and more affordable. This collaboration was made possible after both companies adopted the use the Ripple’s blockchain technology.

Banks from different parts of the world are waking up to what blockchain has to offer as well. Examples include French bank Crédit Agricol, India’s IndusInd Bank, and Itau Unibanco Holding SA from Brazil.

What Benefits Does Blockchain Have to Offer?

Although still in its nascent stages, blockchain holds the potential to change the way people send and receive money to and from foreign countries.

  • Reducing costs. World Bank’s data suggests that the average cost of sending money overseas stands at more than 7%. In addition, while the cost of using a bank averages at around 11%, using an online money transfer company costs an average of 5.3%. While the latter still depend on the former to function as intermediaries, blockchain-based transfers can do away with using banks completely. This, in effect, can help make cross-border transfers more cost effective.
  • Enhanced security. The centralized manner in which banks and most overseas money transfer companies function makes them vulnerable to different types of online threats. Blockchain, on the other hand, is completely decentralized in nature, which makes is rather hard to penetrate. Besides, unique entries corresponding to all transactions are marked in a digital ledger, and remain impossible to fudge.
  • Quicker turnaround times. Most banks still take days to process international money transfers. Their FinTech counterparts may take one to four or more business days, depending on where you and the recipient live. Cryptocurrency transfers do not rely on geographical boundaries and can go through almost immediately.
  • Wider reach. Inadequate access to conventional forms of banking remains a problem in several parts of Asia, Africa, and South America. This has an adverse effect on how people from these regions may send or receive international payments. However, mobile phone usage in these areas is fairly high. With an online blockchain-based cryptocurrency wallet, sending or receiving money can become fairly simple.

Is There Any Possible Downside?

Being exposed to currency conversion twice is a disadvantage that currently exists with cryptocurrency-based international transfers. For example, consider sending money from the U.S. to Canada. You will first need to purchase a cryptocurrency using U.S. dollars. The recipient will then need to sell the cryptocurrency to buy Canadian dollars.

Which Companies Offer Crypto-Based International Transfers?

While most of the older well-established players appear to be biding their time to see where blockchain technology goes, some startups have taken the bull by the horn. Some of the companies that rely on blockchain technology to carry out cross-border fund transfers include:

  • Ripple
  • Circle
  • Abra
  • MOIN
  • Coins.ph
  • BitPesa


With blockchain making its presence felt in various fields, from banking, to ecommerce, to even elections, it looks like it is all set to revolutionize the way people carry out overseas money transfers. Its growth, though, appears to depend on how quickly people start using cryptocurrencies in their everyday lives.

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