The global remittance network is ripe for disruption and a single look at the idea and purpose behind bitcoin and block chain technology can easily suggest that international money transfer giants will be the first group of enterprises to be hardest hit and disrupted followed by banks and finance houses. These organisations will be disrupted and for right reasons because profits and excessive commission charges have always been on the frontline and preceded their activities and not much innovation has happened on their end in a long time. In the meantime technology and telecommunication companies are innovating in ways through which customers can send and receive money locally without hustle and forward those monies as payments to other service providers such as electricity, water and cable television companies and to other mobile users. Customers of telecommunication companies are also able to send money to their loved ones and dependants via the same platform.
For some reason, innovation that has to do with quickly and conveniently getting customers to receive money anywhere they are either via their mobile phones or emails have flown over the heads of international money transfer operators. They do not see any other ways recipients can access their monies other than going to a partner bank branch. Instead of partnering with tech and telecommunication companies who get to the core and grassroots by simplifying payment processes for customers, International Money Transfer operators are ready to stand on their own and reek in the profits. Yet technology such as bitcoin has proven to be tried and tested, and in that regard money can be transferred at a cheaper and convenient rate. On the continent of Africa, bitcoin remittance platform has been smart and have taken the innovative lead to partner with local telecoms companies rather than banks to make cash accessible to a wide range of people within a longer time range. International money transfer operators on the other hand will rather partner with banks and it is easy to see why their method will not last. For one, banks are not accessible in every part of the African continent. Also not all banks liaise with international money transfer operators, micro finance houses which usually can be found in remote parts of various African countries are not on the radar of most international money transfer firms. Therefore customers who receive money via this channel will have to travel to the city to carry out the transaction.
A standard bank carries out other functions apart from money transfer, there are other operations such as payments and receiving of deposits which can be classified as their core business, there is forex, bonds and treasuries trade as well as a thousand and one other functions therefore the possibility of joining long queue which can lead to the loss of productive time cannot be over emphasized. There is the dreaded “our system is down” excuse they give ever so often. Which is to suggest that, customers will have to leave and come back another time. Compare this to simple innovations bitcoin remittance platforms in Africa are churning out and one will see that bitcoin remittance platforms are clearly ready to take over. Bitcoin remittance have been clever for partnering with technology and telecommunications companies to make receiving payments easier and faster. In so doing, they have created a more efficient African payment ecosystems to ease time wasted when using the traditional international money transfer agencies. For example, customers who use bitcoin remittance platform receive messages either via phone in the form of text messages or via email. In that regard customers can conveniently plan their schedules and choose when to go for their monies.
It has often been cited that a poor saving culture, results in slower growth and development. One way we as Africans can increase development is by increasing our rates of savings and reinvest the monies we keep us savings. The current banking systems that exist do not encourage savings and money transfer agencies make this phenomenon worse. When receiving money from international money transfer agencies, it is insisted that all the money is withdrawn without avenues for saving some of such remittances.
Meanwhile it is known that, it is quite tempting to spend cash in possession and less tempting when one consciously decides to save some for future gain. In this regard, bitcoin remittance platform are a step further when compared to international money transfer, this is because recipients of bitcoin from their loved one can decide to send only a portion to the exchange for fiat unlike the regular system where customers are ‘forced’ to withdraw all the money sent to them. The relative stability and increased use of bitcoin makes it an attractive investment and a perfectly acceptable savings option. It must also be noted that, telecommunication companies who liaise with bitcoin remittance operators also gives customers the option to reserve some of the cash into their mobile money accounts. Customers of traditional international money transfer are penalized if they do not withdraw the money by remitting the money back to its sender without the commissions being paid back. Bitcoin remittance users on the other hand, can hold their remittance in bitcoin for as long as they desire.
The greatest argument for bitcoin remittance for us Africans is customers’ ability to save, and savings play a key role in building and developing wealth. Bitcoin remittance is building a new Africa, an Africa powered by savings, investment and an increased capital flow.
Kwaku Abedi is a freelance writer/editor based in Accra-Ghana. He has an interest in bitcoin and writes on bitcoin integration in Africa.