For some countries, more money comes in through remittance payments than through trade. These remittance corridors are some of the most profitable and busiest payment networks in the world. Several large financial institutions have made it their core business model to help make remittance payments possible but their days may be numbered if they don’t adapt with the times. Since Bitcoin is borderless, one of its greatest use-cases is sending money internationally.

What Are Remittance Payments?

For those of you who don’t know what remittance payments are, they are payments that are sent across borders to friends and family living in nations who don’t have access to as much opportunity as more developed nations do. It’s common for exchange students and permanent residents who are living and working in the developed world to work 2, 3, 4, 5+ jobs to make money and then send most of it back home to their families for food, water and often for education.

Currently, the remittance market is dominated by a few major companies like Western Union, MoneyGram, PayPal, Venmo, TransferWise, and others. While these companies have served their markets well for as long as they have been in business, it is time for innovation to disrupt their position as the top remittance providers.

The Invention of Digital Money

In the 1800s the fastest way to move money was by horse which meant that banks had to hire trusted money transfer teams to drive heavily armed stagecoaches full of ledger books, cash and gold across the country to make money transfers between banks. With that kind of wealth moving along the ground it wasn’t long until the rise of outlaws, bank robbers, and the wild west took hold of these transfer routes. After taking on so much in losses these banks began looking to other means to move money around in order to reduce their risk of hijack.

It wasn’t until 1872 that a company named Western Union created a system of passwords and codebooks to send their first recorded “transfer of money through a wire” or what came to be known as modern-day money wiring. In as early as 1877, just five years later, this was used to transfer as much as $2.5 million every year  (approximately $85 million at today’s prices). Thus digital money was born as a system of numbers and codes to keep money safe and secure.

Now, this system of codebooks and human beings on either end of the has since been replaced by computers and expensive encryption processes but Western Union’s centralized payment network is still in use today. It is actually one of the largest payment networks in the world and they are still collecting fees of 5-18% for sending money both domestically and internationally.

One can only imagine how it must have seemed like a scam to give your money to some sort of company like Western Union at the time to send money across the country in a matter of minutes instead of days by horse. This same mentality is still alive and well with people who think that Bitcoin is some sort of a scam but that couldn’t be further from the truth.

Bitcoin Remittance Payments

Now lets fast forward to 2019 where we have computers the size of a phone and can send information all around the world in seconds. With this new technology in the hands of everyone, we now have the ability to create our own payment network that isn’t controlled by any single entity.

Like Western Union first started out as a series of passwords and codebooks, Bitcoin is a series of passwords that are used to edit one big public “codebook” called the blockchain and it is capable of completely replacing existing payment networks. Instead of sending payments on networks like Western Union, you can use bitcoin to send money from anywhere to anywhere without any middlemen and often with lower fees.

Bitcoin also has the ability to send money anywhere in the world except bitcoin is an open-source software run by a network of volunteers around the world. There isn’t a CEO with a massive salary. There isn’t a costly bureaucracy to slow it down. Without any of those extra costs, the network has the ability to be cheaper and those savings stay with the sender and receiver.

Use Bitcoin

If you’re looking for a way to transact money across borders without the need for trusted third parties like Western Union or other payment networks, you should use bitcoin. It’s open-source. It’s transparent. It doesn’t care who uses it. It has more computational security than any other payment network and it’s only growing as more people join the network.