As the popularity of cryptocurrencies is growing, and the increasing number of people have started to use digital assets to send remittances. The other reason for this growth is the high transaction costs while using traditional payment methods such as banks and other online payment systems.
According to a recent report “Sending Money Back Home” by a blockchain focused research company, Clovr, there is a spike in the number of people who are using cryptocurrencies for cross-border payments. The company surveyed 707 people and found that 15.8% of people are using digital assets to send money home. It made cryptocurrency remittance as one of the most popular methods. The method is ranked fourth after online service, money transfer service, or traditional wire transfer.
According to World Bank data, in 2017 over $148 billion were sent abroad from the United States. With increasing globalization, more and more people are moving abroad for work or studies. They have to send money or receive money that is why people living in other countries are looking for ways to send money at the lowest cost. Crypto payment is emerging as the cheapest way to send money where the migrants do not have to depend on the middlemen. According to the latest report by Clovr, crypto payments are cheaper, easier, and faster. This new method of payment has become popular than ever.
The report states that there is a high cost associated with the traditional cross-border payment methods such as Moneygram or Western Union. These companies charge up to 20% to send money, on average banks charge around 10.41% from cross-border transactions. The cost of money transfer depends on several factors such as the country where you are sending money. Crypto payments can minimize such costs. According to the Sending Money Back Home report,
“If some of the largest companies in the world, like Microsoft and Starbucks, are comfortable accepting cryptocurrencies as a form of payment, this should instill confidence in using these new forms of payment for sending remittances.”
The report suggests that to avoid high transaction fee and conversion rates while transferring funds abroad, migrants can take few steps such as converting the government issued currency into cryptos and then back again. It can help the migrants to save significantly on cross-border transactions.
The report further states that for international transfer, men were more likely to use cryptocurrencies than women. According to the report, 85% of people were satisfied with crypto payments. The people who are not using crypto payment methods either have lack of knowledge about the working of cryptocurrencies or skeptical about the payment method.