Trusted remittance services in decentralized ledger technology using a three-layered stack : a proposed model

Remittance is a global service used to transfer money to family and friends. Throughout the world, many companies offer remittance services to families who depend on them for their livelihood. Regrettably, there is an aspect of the remittance transaction that is not adequately addressed in the current remittance model. A majority of remittance transactions are initiated with the clear intention that the receiver will acquire a service, for example, pay for school fees, medical procedures or groceries. Unfortunately, the current model stops managing the remittance transaction when the beneficiary collects the money and does not ensure that the remittance is correctly used to acquire the intended service. This research addresses this limitation in proposing a model of remittance that considers all the steps necessary to ensure that the remittance transaction concurs with the intention of the expeditor: sending the money, acquiring a service and paying for a service or returning the money in the case that the service is not provided. In this model, the amount transferred through remittance will only be used for its intended purpose as expected by the remittance’s expeditor; otherwise, the expeditor of the remittance gets the money back.This type of remittance of service is called a trusted remittance of service (TRS) compared with the legacy remittance of money that stops with the collection of the money by the beneficiary. After conducting an in-depth analysis of the current limitations of the remittance of money in the city of Kinshasa, in the Democratic Republic of Congo, as an example, this thesis proposes a generic model for TRS. The proposed 3-layered stack model includes the logical (business requirements) and technological requirements needed to safely conduct a trusted remittance of service. This proposed model, independent of any technology, allows for better design and implementation of not only trusted remittance of service transactions, but also of other business transactions that behave similarly.The validation steps of the proposed 3-layered stack model showed that the emerging distributed ledger technology (DLT) and blockchain technologies reduce the development time needed to develop a prototype. By design, DLT provides the foundational layer of the 3-layered stack model, which is the layer that verifies and further guarantees the security and authentication of the remittance actors and their respective transaction.This thesis presents all the steps leading to the experimentation of a working prototype based on the proposed 3-layered stack model. The research results concluded that indeed, the 3-layered stack model can be implemented using Ethereum blockchain technology to show the potential of the TRS model proposed. However, it also showed that when using this technology as the foundational layer for implementing the 3-layered stack, additional elements inherent to this technology, such as the notion of gas or a penalty for running code in the Ethereum Virtual Machine, have to be considered in order to provide end users with a financially seamless experience similar to those they can expect from the current remittance methods of money providers.