Fuleex matters as we aim to Address the Unbanked Economy with Blockchain Technology
Today, more than a third of the world’s adult population do not have access to proper and efficient financial services around the world. This is a rather surprising statistic in today’s context, considering the world is very interconnected. Majority of this group of people come from low and middle-income emerging markets. According to the World Bank, over 2 billion people still do not have access to banking services. This outlines the fact that so much can still be done to improve the lives of people that fall in this category. The World Bank and its partners have set an ambitious goal to achieve universal financial access for working-age adults by 2020.
A large part of achieving this goal is to shift our focus to mobile financial services. This is more realistic as compared to building physical infrastructures in more areas because of the increasing rates of internet access in emerging markets, resulting in increased mobile phone network accessibility. On top of this, ultimately the most important factor for this group of users is cost-effective transactions. They will not be able to afford the normal fees currently being charged by banks and remittance companies to transfer payments, especially when executing cross-border payments. This situation should be addressed seriously because in such a globalized world that we live in today, it is very common for people to travel abroad just to land a decent-paying job and earn a living for their family back in their hometown.
Impact of Blockchain Technology
Blockchain technology is a public ledger of transactions distributed among a large network of computers, without needing the approval of a central authority. There are a number of ways how blockchain can benefit the cross-border payments industry, which in turn can benefit the global unbanked economy. Firstly, one must understand how it works. Transactions that occur within a certain timeframe are validated and recorded as a “block”. This block is then added to the “chain” of blocks which represent past transactions.
Blockchain is based on 4 fundamental pillars; peer2peer, cryptography, smart contracts and ledgers. To put it in simple words, blockchain is able to facilitate transactions on a public ledger automatically when certain specific conditions are met. With such capabilities, utilization of blockchain technology in cross-border money transactions is able lower costs and increase efficiency. This is made possible as it enables the middlemen to be cut off (in this case, banks and financial institutions). With the current fees being charged by remittance companies such as Western Union, foreign workers suffer the most as they incur the high percentage charges just to transfer small amounts of money back to feed their families back in their home countries.
On top of that, blockchain transactions are transparent and immutable. When you make a transaction, you are able to witness the status of it online yourself. When the required number of verifications are satisfied, the sender would be able to observe when the amount is transferred to the recipient, and the recipient would be able to see the amount being reflected in the balance immediately. The occurrence of this transaction is fixed, and no one can alter it on the public ledger.
This efficient P2P method of cross-border payments is going to disrupt the entire payments industry as users no longer need to pay exorbitant amount of fees to banks and financial institutions as middlemen. When tied together with mobile services, low and middle income foreign workers will benefit the most as they need not pay ridiculous amount of fees when transferring small amounts back home anymore and can make these transfers themselves. The potential of blockchain technology is huge. People around the world are only starting to try and understand it. As of now, we are already seeing some disruptions taking place due to new innovations utilizing the blockchain technology. When it reaches a point where the masses truly understand how powerful it can be, brace yourselves for a wave of disruptions across all relevant industries on a very large scale.
Why Fuleex matters
The World Bank has estimated that the official recorded cross-border payment activities to developing countries is expected to grow from $450 billion to $616 billion, from 2017 to 2018. This statistic outlines a huge market that’s revolving around the global migrant worker economy. It also represents an extraordinary opportunity for disruptions in the entire industry, considering how high the current global remittance charges are. This is where Fuleex aims to enter this underserved economy by incorporating an international payment service, offering accessibility for individuals in different geographical locations to make cross-border payments using FULX Tokens which can be used in over 30 countries. With our Money Service Center partners’ already existing money service network, users can now trade and arbitrage the demand locally as well as internationally. Building on that, Fuleex will be expanding its geographical coverage by setting up offices and operational centres in strategic locations such as Hong Kong, Taiwan, Australia, and many more.
Keen to learn more about Fuleex? Visit us at our website at www.fuleex.io
