BLOCKCHAIN MIGHT COMPLETELY REPLACE TRADITIONAL REMITTANCE BASED SERVICES
The blockchain is a public ledger in which transactions are recorded in real time at regular intervals. The ledger is organized in a manner that allows anyone to go back into the past and review transactions. In other words, an auditable track of all the transactions that ever occurred is kept. It is possible to find out where every coin has been, which is a very useful tool for the financial system and law keepers.
Traditional remittance methods like money orders, demand drafts and bank cheques, involving agents, take a few weeks to reach the beneficiary. If one uses a conventional remittance method like a bank cheque transfer, it is usually kept on hold by the bank authorities for 2–3 weeks, after which the transfer is conducted. Different agencies have different sets of rules and regulations, which have to be adhered to before the transfer can be initiated. Traditional money transfer agents are singular bodies and unavailable around the clock. Also, manual involvement only increases the risk of the transfer duty being miscalculated or misplaced and there is no tracking system to check the status of your transfer. Agents also tend to charge higher fees and the exchange rates offered tend to be unreasonable. Thus, the transaction expense doesn’t seem to be worth it and the transaction turns out to be ineffective for the remitter. Besides, with a financial institution, there is tiresome paperwork involved before the transfer can happen.
An efficient and time-saving method of international money transfer is needed to conduct remittances in an orderly manner, providing a great deal of convenience to the individuals sending their hard-earned money back to their home country, to their family. Efforts have been made in implementing general principles to improve competitiveness of the money transfer market, reducing the cost of operation for sending global remittances, and measures have been taken to appropriate the risk involved. Due to a large number of stake-holders, there would be great value in establishing a number of task forces to provide guidance and address the issue at a global scale. Regulatory bodies have to be more proactive with regards to enforcement.
Now, in addition to providing these solutions to the traditional remittance procedure, technology has also given us the concept of blockchain, that reduces the need to come up with intensive solutions and instead conduct money transfer electronically through a state-of-the-art system without any legal hassle. Firms like MoneyGram, Western Union, amongst others, maintain a $550 billion business through a remittance network (World Bank) and about $200 billion of it are unreported. The usual fee is 7%-10% besides other charges that act as shadow transactions, leading to uncertainty in the minds of the customer regarding the transfer. Normally, a traditional remittance business filters your transactions about half a dozen times. About $63 billion could be saved by using digital currency remittance systems, and transfer fees can be driven down to 2%. The migrant population which does not have access to conventional banking systems pays the highest fees, which is unfortunate since they need money the most, and cannot really afford transfer fees over the transfer itself. Digital currency could prove to be a big value-addition to the society by making its people economically independent and provide for their financial inclusion.
LaLa Transfer features local and global remittances, using LaLa Exchange for both fiat and non-fiat currencies, built upon Hyperledger Blockchain in the backend. In fact, border-less remittance ecosystem is LaLa World’s USP, achieved by putting itself on the trusted blockchain mechanism, and providing the underbanked an efficient and reliable option to conduct international money transfers with ease through its very own LaLa Wallet. This will ensure financial inclusion of the underbanked families and also create more opportunities and savings for themselves by not paying for unnecessary fee. With the help of an Internet connection, money can be obtained at lightning pace across borders, bridging the financial gaps.
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