Google is likewise attempting to get a foothold in the attractive remittance industry. Google Pay collaborated with Wise and Western Union to offer its tailor made global money transfers and cross-border payments, as we revealed in May.
You’ve undoubtedly heard of Western Union, but you’ve probably never given much thought to what the business performs on a daily basis. Western Union, which has a market capitalization of about $9 billion with operations in over 200 countries, enables individuals to transfer money to family and loved ones both locally and globally.
Nevertheless, what most individuals don’t know is that Western Union charges are exorbitant. Transfer costs vary based on the country of destination. Sending $1000 to a Canadian receiver, for example, will incur a fee of between $10 and $95 based on the mode of payment. Furthermore, Western Union charges four kinds of transfer fees: transfer costs, intermediate bank fees, exchange rate fees, and extra expenses.
That isn’t everything. Transfering money via Western Union or any of the aforementioned businesses may take many days, if not weeks. This is just crazy.
To the question, “Is it feasible to transfer money abroad without incurring any fees?” your first thought may be “Is that even conceivable?” To be sure, the answer is yes. Businesses are starting to utilize innovation to challenge legacy banks and conventional payment companies like MoneyGram and Western Union, thanks to advancements in blockchain technology and cryptocurrencies.
In order to quickly transfer money to someone anywhere in the globe without paying any costs, you may go with Strike, a fintech crypto company that has emerged recently. Jack Mallers, who’s also the CEO of Zap, a bitcoin investing and payments firm, created Strike, a digital currency trading and payment platform that uses the Lightning Network.
Earlier this week, Bitcoin made monetary history when Jack showed, in real-time video, how he transferred $10 from the United States to Nigeria via the Bitcoin Lightning Network in under two minutes and without paying a single cent in fees. As shown in the video, Jack was able to transfer $10 in Bitcoin to Bernard Parah in a matter of seconds.
In a series of following tweets, Jack went on to describe how the technology works. Jack explains in the tweet below: “I didn’t have to make the transfer via a financial middleman like @WesternUnion, obtain @bernard parah’s private banking information, or wait days for the money to settle. My US dollars are now compatible with the world’s first open monetary network thanks to @ln strike.”
There is nothing special about this transaction to the normal observer, and it may seem to be one of the many financial payments made on your standard fintech app. But Jack expands on the subject further, explaining that it goes far deeper.
The transaction was made feasible through the combination of Strike and Bitnob, which is also linked with the Bitcoin Lightning Network, a “layer 2” payment system intended to be placed on top of a blockchain-based cryptocurrency like Bitcoin or Litecoin. Lightning Network is a decentralized network that uses blockchain smart contract capabilities to allow fast payments across a network of customers, while Bitnob is a fintech company that develops Bitcoin payment solutions for African people and companies.
With @Bitnob_official‘s Lightning Network integration, we now have free, instant, non-reversible remittances of any size to and from the United States, Nigeria, and Ghana.
$10 in my US bank account became spendable NGN for @bernard_parah in seconds.
Monetary history. pic.twitter.com/UXTf70qkpR
— Jack Mallers (@jackmallers) August 19, 2021
With the core integration in effect, Jack was able to transfer money to a user in Africa in real time. Pomp puts it best: “Jack’s technology and users may instantly deal with Bitnob users, despite the fact that the two businesses don’t know one other or have any official connection.”
“This is similar to Cash App in that it allows you to transfer money to Venmo. In the legacy world, that would never happen. The systems are not designed with open standards in mind. They are fortified fields. This leads us to the following point.”
.@bernard_parah didn’t have to bus to a @WesternUnion to pick up the money, he didn’t owe any intermediary a percentage of the transaction, the payment wasn’t reversible and settled instantly.
He simply withdrew to his bank account and had spendable Naira in seconds. pic.twitter.com/Qatw8MWZ5m
— Jack Mallers (@jackmallers) August 19, 2021
The world is moving to a singular, open, global payment standard built on a distributed network.
A world where all services are interoperable, no matter their geographic location, currency, or jurisdiction.
No balance sheet float, fixed costs, T+ settlement, forex risk, etc.
— Jack Mallers (@jackmallers) August 19, 2021