WU has been on the market for more than 150 years. They’ve transferred cash physically from one place to another, witnessed the creation of banking sector and creation of the Internet, which brought later online transactions, which we use almost every day. Currently, next emerging technology is about to revolutionize the money transfer market. However, this time it can pose a real threat to the old school remittance companies such as Western Union or MoneyGram.
What is Blockchain?
You might have heard about “cryptocurrencies” or at least “Bitcoin” (the first cryptocurrency), which gained significant media attention in recent years. It is a unique digital currency, which can be transferred from one wallet to another. However, let’s focus on the sole technology behind it, which is called blockchain.
There are already various different projects utilizing this technology. It is proving to be very useful for making secure and fast information and data transfers. Advanced encryption makes the network much more secure than any other regular platform. Moreover, the maintenance costs are relatively low, which allows the blockchain-based currency transactions to cost virtually less than a dollar. So, there is a way to send money online like with PayPal, but much faster, cheaper and safer? Well, yes and no.
Uncertainty of Cryptocurrency market
The cryptocurrencies are at this point rather unreliable. The market is relatively young, therefore there are lots of price fluctuations and speculations, which drive prices of these digital coins in various directions. And what is the point of paying for something with a coin, which next day can be worth twice less than at the moment of transaction?
However, the costs and transfer fees for such transactions are unbelievable. To send any amount of money through Ethereum (which is the second largest cryptocurrency), you need to pay less than $0.1. Moreover, your recipient gets the transfer after less than a minute.
Remittance of future
Some remittance companies have noticed the possibilities offered by this blockchain technology. They decided to integrate crypto transfers one way or another into their platforms. They also conduct some of the regular money transfers through blockchain-based network. That way, they were able to cut down transfer fees by even as much as 50%. For example, TransferGo which adopted this technology extended their services to more remote countries and increased the speed of the transaction from a few days to only a few minutes.
What’s the most efficient way to send money now?
People have already turned away from classic bank wires, as mainstream financial institutions could charge as much as $30 per international transfer. Online money transfer platforms have dominated the market. You can easily send money internationally for a few dollars. However, with the new technologies showing how cheap and fast the transfers could be, the remittance companies are trying to come up with ways to stay relevant. Surprisingly, it seems that we won’t experience any sort of a war for the money transfer market. Instead, new technologies are being adapted and integrated with the classic financial market. The platforms which decided to give them a try are offering more affordable transfers, which are often delivered within minutes. If you want to sort the companies based on traits such as transaction fee, speed or safety, you can use Wirly.com’s database of various remittance companies.
Combining fiat currencies with crypto
There are already cases of “digitizing” classic fiat currencies such as dollar or euro. Their digital equivalents can be sent as cheap, fast and secure as cryptocurrencies. However, as their values are directly connected to the real dollar or euro, they are much more reliable in terms of wealth storing and purchasing goods.
Sending money in the future
We live in the age of globalisation, where we handle numerous international transactions each day. We buy goods online, run international businesses and hire people from different countries. If more and more money transfer platforms find a way to offer cheap and reliable remittance services, people will save huge amount of money, which is now wasted on fees. This will open new opportunities for many businesses and services.