Sending money abroad has long been associated with unnecessarily high fees and bad exchange rates. The process often leaves users with a bad taste in their mouth and the feeling of being ripped off.
The solution that blockchain technology offers to this problem is often touted as one of it’s most prominent advantages and a key aspect to drive adoption.
As immigration rises due to third-world conflict or poverty, and travel becomes a more viable option for global citizens, more people than ever are sending money home to relatives. Data from the World Bank reveals that in 2017, as much as $148 billion was sent abroad just from the United States alone.
The decentralized nature of cryptocurrency means there are no middlemen or unscrupulous bankers slipping in hidden costs and high fees. Often, the only cost involved is the almost negligible transaction fee applied to pay miners and keep the network secure. We recently reported on a $265 million Bitcoin (BTC) transaction that cost less than $50 to send – thousands of times cheaper than a traditional bank would charge.
Sending Money Back Home
Blockchain research company Clovr has recently released a report entitled “Sending Money Back Home“, that investigates the exponential rise in the use of cryptocurrency to settle international remittance. The report found that banks charge an average 10.41 percent fee to send money abroad and that most people send money home around five times a year, often paying over $500 in fees annually.
In compiling the report, Clovr surveyed 707 people who had recently sent money abroad and found that almost 16 percent utilized blockchain-based systems to do so. Considering that approximately only five percent of Americans own Bitcoin, the number is surprisingly high.
Lack of knowledge regarding the technology and fears of recipients losing or being unable to use the funds were cited as reasons that continue to hinder adoption. However, as banks continue to overcharge customers, it seems only natural that more and more users will gravitate towards blockchain and its cost-saving benefits.