Remittances are an essential way of supporting domestic economies in regions where financial hardship remains relatively common. Several regions worldwide rely on these money transfers, yet the COVID-19 pandemic is causing an issue. Sub-Saharan countries are at risk of losing even more remittances from migrants.
The Current Remittance Landscape
Sending money back home to friends and family is a way of life for many migrants who seek their fortune elsewhere. In Sub Saharan Africa, remittance flows are a crucial aspect of the local economic growth. Without that money coming in from migrants, many people would face significant financial hardship for an extensive period.
As most African migrants attempt to work in Europe, North America, the Middle East, and Asia, they are now at financial risk. Many migrants lose their work or face pay cuts due to the ongoing COVID-19 pandemic, leaving less money in their pocket to send back home.
Whereas remittances to Sub-Saharan Africa tallied up to $48 billion in 2019, that number may have declined to under $38 billion in2020 due to COVID-19. An expected decline, as global remittances, fell sharply in 2020.
Making matters worse is the high cost still associated with sending money. Even though these costs decreased from 2011 to 2018, they remain over 9% of the amount sent to Sub-Saharan Africa. Other regions have to deal with remittance fees of 6% to 8%, and Latin America and the Caribbean even noted an increase in average costs. Paying an arm and a leg to move money across borders is no longer acceptable in this modern-day and age.
Are Cryptocurrencies The Solution?
On paper, cryptocurrencies such as Bitcoin can provide a significant improvement over traditional remittance solutions. It is a cheaper option to move money anywhere in the world, and one can receive the money through any internet-connected device without having to leave the house or owning a bank account. More importantly, the recipient of the funds will be in full control of the funds, assuming they hold the private key to their Bitcoin wallet.
There is also the aspect of removing the need for any intermediaries. With cryptocurrencies and blockchain, all transactions take place between sender and receiver directly. Not only does this remove friction, but it also creates a more efficient system.
Even though Bitcoin gets flack for being a “slow” network, transactions often take an hour or less to confirm fully. With remittances, it is not uncommon to wait days or even a whole week until the money arrives from the other side of the world. Efficiency-wise, cryptocurrencies offer many benefits, even though they might not always be too user-friendly for novices.
CoinZoom Offers A Solution
To change that narrative, more intuitive services and products are needed for remittance solutions. CoinZoom provides a lot of useful functionality in this regard.
Its Zoomme service is dubbed as the “Venmo for Crypto”, making it easy to send or receive money to and from anyone else in the world without having to pay any fees. As a peer-to-peer crypto and fiat remittance system, all CoinZoom customers can send USD or crypto internationally right away.
ZoomMe gives an extra purpose to cryptocurrencies and does so without charging any commission or introducing hidden fees. It is a very simple and straightforward system that doesn’t require special permission to use. The limits of how much money one can send through ZoomMe depend on how many ZOOM tokens one holds. Several different tiers exist, each of which has its own requirements.
Unlike traditional remittance providers, CoinZoom can provide a frictionless and feeless money transfer solution globally. It has done so by embracing blockchain technology and cryptocurrencies, two forms of technology that any company can incorporate into its service today.
The big question is whether traditional remittance providers will explore this option or continue to charge exuberant fees for moving funds digitally from one account to the next.
Being able to send money around the world at no extra cost and without relying on centralized infrastructure can make a world of difference for millions of people.
Even in Sub-Saharan Africa, there are plenty of people with a computer or mobile device capable of accepting cryptocurrency transactions. ZoomMe empowers all of these individuals, regardless of their current access to financial products and services.