Remittance companies can’t help the underbanked, but Sendnomad is doing it with crypto.

Developing countries don’t follow the same technology adoption paths as the US/Europe. For example, while email remains a popular means of communication in the US, most developing countries completely skipped email in favor of instant messengers, even for all business communication. We’re seeing the same with banks and credit cards. In developing countries, up to 70% of the population doesn’t have a bank. Instead, they rely on mobile cash / e-wallets like GCash, Vodafone, Orange Money, Grabpay, and GoPay as their primary means of payment.

And this is a problem for remittances. All major remittance services were founded by either American or European founders, and require all your recipients to have a bank account. While this is completely reasonable in the US/ Europe, this is a huge challenge for people trying to send money to developing countries.

Founders of Sendnomad, Kairat and Zholdas, are first generation immigrants from Kazakhstan, a country in Asia with a median income of just $400/month. Kairat faced a consistent blocker when trying to send money back home to his mom.

“My mom has never had a bank account in her life. This is completely normal in my home country, but it became a major obstacle for me when I moved to America and tried sending money back home to support her. Every remittance service asks for recipient’s bank account and routing numbers and my mom just doesn’t have a bank”

Remittance services require your recipient to have a bank account to work. This was not a viable option for Kairat and Zholdas, since in their home country, the majority of the population is underbanked, and e-wallets, not credit cards, are the dominant forms of payment.

The method they had to resort to was finding people in FB and Whatsapp groups who had spare money on their mobile wallets in their home country, paying them via venmo, and asking them to use their local mobile wallets to send further.

Their story points to a growing problem: the modern financial system was built for US and European consumers, where virtually every adult has a bank account. This is not suitable for developing countries, where most adults do not have access to a bank account, but have a smartphone and an e-wallet.

This is because international transfers today are done through SWIFT, and only bank accounts can be reached. Users of mobile wallets like GCash, Grabpay, and GoPay, cannot receive money through this system, since they are not traditional bank accounts.

Cryptocurrency does not have the same limitation. By using a crypto remittance service like Sendnomad, you can send to any recipient with a mobile wallet. It’s really cheap (0.5% fee) and fast (~15 min from send to receive).

Here is how crypto remittances work behind the curtains:
Step 1: Sendnomad finds a person in your destination country who wants to BUY cryptocurrency at this moment, and who is willing to use their mobile wallet to pay for it.
Step 2: Sendnomad charges your card in US dollars, uses it to buy crypto, sends it to the buyer from step 1, and the buyer sends the right amount to your recipient’s mobile wallet.

While this may sound complex, it’s actually done near instantly, and for a total of 0.5% fee. This method of sending money is actually not new, and has been around for a while. But in 2020 crypto has reached new heights of popularity in developing countries, and there is now enough liquidity to let you do this instantly.

Sendnomad hides this unnecessary complexity away from you, and executes all the needed operations in the background. For you, your card gets charged, and your recipient receives the money within 15 minutes. Sendnomad takes care of the operational overhead and any volatility involved with crypto.