Cryptocurrency is exploding as a primary source in remittances, across the globe. A survey of 707 people who have sent money from the USA, revealed an interesting trend of the growing influence of cryptocurrency. Survey conducted by a cryptocurrency firm called Clovr, delves into people’s remittance habits, what the money is being used for, and what methods they’re using to do so.
In 2017, an estimated $150 billion was sent out from the United States of America to individuals in other countries. The top countries receiving most remittances from the U.S are Mexico, China, India, Philippines, Vietnam, Guatemala. Remittances to Mexico alone was observed to be around $30 Billion. No European country made it to the top ten list.
More than half of the people, surveyed, indicated that they use PayPal and money transfer services like Western Union and only 15.8 percent used cryptocurrency. 25.7 percent preferred traditional bank wire transfers or credit union, 12.2 percent used prepaid cards, 11.8 percent use check or money order via mail. Other popular methods included money order online, cash via mail and wire transfer via post office. Though comparatively, less than one-fourth of people surveyed used cryptocurrency, the satisfaction rate is much higher, and it is inevitable that this method will soon catch up in a couple of years.
The major advantage of cryptos is that they avoid the high transaction fees and conversion rates typically associated with transferring funds abroad. Online money transfer methods charge only around 6% of the average cost while traditional banks charge around 10% for the same amount. Customer satisfaction stood at 93.3 percent for online services, 84.1 percent at money transfer services and 73.3 percent with the traditional wire transfer. Only 1.3% of people were majorly dissatisfied with online methods compared to around 15% for traditional wire transfer. Survey indicates that the money transfer industry is “ripe for disruption” through the introduction of cryptocurrency-based solutions. Experts say that cryptocurrency would potentially offer a cheaper and faster way to transfer funds.
Virtual assets like Bitcoin has now become a household name over the last several years. The report said that few of the largest companies in the world, like Microsoft and Starbucks, are presently accepting cryptocurrencies as a form of payment and this should instill confidence in using these new forms of payment for sending remittances.
Experts remain adamant that this is the future. Governments, the world over, are grappling with understanding the technology and passing regulation on the same, but few years down the lane, blockchain payments and cryptocurrencies would be “the primary vessel of remittances,” the report concludes.