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Why Citizens of Developing Nations Need Better Remittance Services

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by Julia Sakovich · 4 min read
Why Citizens of Developing Nations Need Better Remittance Services
Photo: Bococoin

Many citizens from developing nations are working abroad to improve the quality of their lives and support their families. At the same time, financial institutions are using them to take huge cuts from their remittance payments.

It’s a common practice among citizens of developing nations to remit money back home to help and support their families.

According to the World Bank’s estimates, remittance flows to low and middle-income countries are projected to reach $470 billion in 2021, even with a 7.5% decline from last year.

Yet, despite the large market size, traditional remittance services use inefficient payment networks, in which the funds go through multiple correspondent banks before reaching the recipient.

As a result, financial institutions charge high fees, with service providers deducting an average of 6.51% from each transfer in Q4 2020. Furthermore, as 1.7 billion adults remain unbanked, they can’t access traditional financial services to remit funds back home.

By now, it has become clear that the above issues have to be solved as soon as possible. But are there any viable alternatives to traditional remittance services on the market?

Solution: Crypto Cross-Border Payments

Since Bitcoin’s launch in 2009, cryptocurrencies have disrupted multiple industries and reached an over $2.1 trillion market size.

As their underlying blockchain networks operate on a peer-to-peer (P2P) basis, digital assets completely lack intermediaries.

For that reason, they feature cost-efficient and rapid transfers.

While banks charge 6-10% for wire remittances with processing times taking 3-5 working days, Deloitte estimates cryptocurrency cross-border transfers to reduce fees by 40-80% while achieving real-time settlement in 4-6 seconds.

In addition to enhanced security provided by decentralized architecture and public-key cryptography, digital asset networks are open, meaning that anyone can use crypto with a compatible device and a working internet connection.

For that reason, adopting cryptocurrencies for remittances can effectively solve the unbanked problem as they can easily access digital assets, which they are free to hold, receive, and transfer to anyone, including their family and friends abroad.

Bococoin: Faster, Better, and Safer Than Banking

While cryptocurrencies provide the unbanked access to financial services and offer alternative remittance solutions for international workers, some of the most popular digital assets lack the scalability to achieve such goals.

Bitcoin, the world’s oldest and top cryptocurrency by market capitalization, uses the Proof-of-Work (PoW) algorithm to reach consensus. Since it is highly inefficient – as it requires miners to operate their equipment in 0-24 to solve complex mathematical puzzles –, the BTC network can only process roughly five transactions per second (TPS).

For that reason, the Bitcoin network can easily get congested during times of heavy usage, which leads to excessively high transaction fees and processing times.

Bitcoin is currently struggling with network congestion, with the average fee for a BTC transaction jumping as high as $44 on April 18.

Ethereum, the second-largest digital asset by market cap, is in the same shoes (it is also using the PoW consensus mechanism), which drove up transfer fees in the network to an average of $21.86. The prices are even higher for smart contract transactions, with a standard token swap on the Uniswap decentralized exchange (DEX) costing over $75 in gas for users.

Bococoin, the next-generation global payment network, solves the above issues by utilizing a robust and highly scalable blockchain network to facilitate both domestic and cross-border digital asset transactions between its users.

Using the Tendermint engine, Delegated Proof-of-Stake (DPoS) consensus mechanism, as well as state-of-the-art security, Bococoin features a fast-growing ecosystem and a high-throughput infrastructure.

With lightning-fast, 10-second block times, Bococoin customers can send and receive funds in and across borders instantly. Furthermore, the blockchain platform’s inexpensive fees – users pay an average of $0.0001 per transfer – make it a viable solution for micropayments as well.

“Bococoin allows anyone in the world to enter a new era of the digital age where everyone – including the citizens of developing nations, workers abroad, and the unbanked – can access fair, inclusive, transparent, and efficient financial services,” Jessica Jia, CEO at Bococoin, stated.

Focusing on the highly populated areas of South Asia, East Asia, Asia-Pacific, and Sub-Saharan Africa, Bococoin provides a next-generation of financial solutions to those who need them the most.

Need for Efficient and Inclusive Financial Services

While access to financial services should be universal, a significant portion of the world is either under-or unbanked.

Even those with access struggle with the banking world’s inefficiencies.

Many citizens from developing nations are working abroad to improve the quality of their lives and support their families. At the same time, financial institutions are using them to take huge cuts from their remittance payments.

Utilizing transparent, open, and peer-to-peer payment networks, cryptocurrencies provide an effective solution for those who need them the most by achieving cost-efficient and rapid transfers without intermediaries.

Incorporating cryptocurrencies, Bococoin has identified this opportunity to develop a fair, inclusive, secure, and robust cross-border payment network where everyone can access a wide range of financial services without banking.

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Julia Sakovich
Editor-in-Chief Julia Sakovich

Having obtained a diploma in Intercultural Communication, Julia continued her studies taking a Master’s degree in Economics and Management. Becoming captured by innovative technologies, Julia turned passionate about exploring emerging techs believing in their ability to transform all spheres of our life.

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