Where Are Cryptocurrencies in the World of Overseas Money Transfers?

Where Are Cryptocurrencies in the World of Overseas Money Transfers?

Author: 
ICompareFX
Date: 
December 07, 2018
Read time: 
3 minutes
Ripple
Remittance
Future

People who need to send money overseas have benefited significantly through the arrival of several FinTech players in this realm over the last couple of decades. In more recent times, it appears that blockchain-based cryptocurrency transfers are also finding an increasing number of takers. However, where do cryptocurrency transfers stand in the current scheme of things?

People who need to send money overseas have benefited significantly through the arrival of several FinTech players in this realm over the last couple of decades. In more recent times, it appears that blockchain-based cryptocurrency transfers are also finding an increasing number of takers. However, where do cryptocurrency transfers stand in the current scheme of things?

The international remittance industry is rife with competition for a simple reason – there’s a lot at stake. Consider this – over U.S. $570 billion was sent by migrants living in different parts of the world as remittances in 2016. While three of the older companies still dominate this field, two are already putting blockchain-based transfers through a testing phase.

 

Is Ripple Creating a Big Wave?

U.S.-based Ripple Labs Inc. appears to be at the forefront when it comes to using cryptocurrencies for overseas fund transfers. XRP, the company’s cryptocurrency, is essentially designed for enterprise use. It gives banks and other financial institutions a secure and on-demand option that lets them source liquidity for overseas payments easily and quickly.

MoneyGram was the first major overseas money transfer company that decided to put Ripple’s XRP through a testing phase using xRapid, a service offered by Ripple. Western Union was next in line. Santander, a Spanish bank, used Ripple's xCurrent technology to launch One Pay FX. This was the first blockchain-based mobile app for overseas payments.

Until now, Ripple’s partnerships have extended to over 100 financial institutions from different countries. Some of the other prominent names include America Express, UBS, Royal Bank of Canada, the Japan Bank Consortium, Crédit Agricole, and Itau Unibanco Holding SA.

Benefits of Cryptocurrency Transfers

Traditional overseas money transfer companies may want to look at how they might benefit by offering cryptocurrency transfers to their customers.

The cost factor.  According to data, the average cost of using the services of banks to transfer funds overseas is around 5.7% more when compared to online companies. This is despite the fact that the latter relies on the former to function as intermediaries. Since cryptocurrency transfers can eliminate the need of banks completely, transfer costs can reduce even further.

Speed. Banks may take days to process overseas money transfers. Factors such as where you and the recipient live as well as the desired transfer method tend to affect turnaround times when you work with online companies. A BTC transfer may process in around an hour, an ETH transfer takes around a couple of minutes, and an XRP transfer processes in near real-time.

Greater reach. Unbanked and underbanked populations in parts of Africa, South America, and Asia still rely on a handful of companies with agent locations to send or receive money to or from overseas. It is not unusual for them to pay steep fees. They can now circumvent this problem by making use of cryptocurrency-based digital wallets.

 

Possible Downsides

Depending on whether or not you and the recipient use the same cryptocurrency, the transfer might expose you to currency conversion twice. Imagine you want to send money from the U.S. to Canada. You first need to buy a cryptocurrency using U.S. dollars. Then, the recipient will sell the cryptocurrency to purchase Canadian dollars. In addition, in might be worth your while to keep track of regulatory changes surrounding the use of cryptocurrencies in your country.

 

Overseas Cryptocurrency Transfer Companies

While some of the older players are looking at what cryptocurrency transfers have to offer, some new startups are using only blockchain technology to carry out international money transfers. Some of these include:

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

 

Conclusion

Carrying out overseas cryptocurrency transfers gives end-users the ability to save time as well as money. Besides, an individual no longer has to get into the intricacies of the process, with a number of companies out there ready to do the needful by charging rather nominal fees.
 

Author Bio

Jon works as a researcher with iCompareFX. This online platform lets its users compare the world’s top international money transfer companies. Outside of work, Jon likes exploring music from genres such as the blues, jazz, and alternative rock.

Posted by ICompareFX

ICompareFX is a global review and comparison service for top money transfer providers. They deliver useful information to help individuals and businesses make the right decision when it comes to transferring money.

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