Remittance on the Blockchain
By: Team Remiit
Tags: Remittances, Remiit, Blockchain, Market, Bitcoin

Whether you have or have not previously made an overseas remittance, if you needed to send fiat currency from one country to another, where would you go to get this processed? Under many circumstances, people choose to use banks or well-known money transfer operators like Western Union or Moneygram because it is important to go through a trusted institution to manage personal funds. Thus, Not only was this a high commission fee, but it also consumed days to complete the transfer. However, many fintech companies began to appear providing fast and affordable remittance services. The fees become 80~90% cheaper than the banks with time taken reduced to under 10 minutes.

How is this possible? The answer is cryptocurrencies. Early this year, cryptocurrencies which were a major measly cause of speculation was in fact a suitable tool for conducting remittances overseas, therefore many fintech companies have been providing services through it.

In the case of overseas remittance through the bank, it must go through “Remittance Bank -> Intermediary Bank -> Disbursement Bank”. In addition to the commission paid to each bank in the process, there are telegraphic fees and exchange fees. However, overseas remittances using cryptocurrencies do not go through intermediary banks, so there is no exchange fee and you only have to pay a transfer fee of 1~2% of the remitted amount.

As Bluepan (MTO we have been running for the past 2 years), we have been providing remittance services to China, the Philippines and many other countries through cryptocurrency transfers and have processed more than $80M in remittance within 2 years. The process of overseas remittance using cryptocurrency is as follows. When a sender applies for remittance to the Money Transfer Operator, the MTO converts the local currency to cryptocurrency and sends it to the partnering MTO in the receiving country. Then the partnering MTO liquidates the cryptocurrency into the local currency to pay out local currency to the receiver, hence completing the remittance process.

BluepanNet’s Philippines Service Outlet

Working as an MTO for the past 2 years, we have discovered issues and troubles that all the MTOs face in common. In order for MTOs to operate the remittance business, it is necessary to find partners in various countries, and this is not a cheap and easy process. As large amounts of funds are being transferred, mutual trust is essential and in order to build this trust, e-mails and calls will not suffice, meaning you must spend a lot of time building that trust face to face. Therefore the level of opportunity cost, time and money lost to create this partnership, it is significant, especially for the smaller businesses.

To solve the difficulties of these MTOs, we developed REMIIT, a Blockchain Powered Remittance Platform. REMIIT will not only reduce the costs of MTOs mentioned above through trusted smart contracts, but will also be a stepping stone to expanding businesses.

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