LALA World: Revolutionizing The Way Remittance Is Done
The importance of improvement in systems required for cross-border money transfers cannot be overstressed, as remittances are essential to the development of a country’s economy, especially so when it is impoverished. These cash inflows reduce poverty, increase financial inclusion and dramatically benefit the quality of life of its recipients. They also indirectly add to the national economy of the countries that these recipients occupy. According to the World Bank, as of late 2016, money which migrants are sending back home to their dependants totalled around $440 billion, which is about three times higher than total official aid flows. While the progress of the remittance systems is a staggering one, it is believed that these transfers would have been higher in the absence of high transaction fees and a variety of other charges that plague the market and reduce the positive impact of sending these funds across borders.
As current trends go, the average cost of sending cross border remittances through money-transfer services like those by MoneyGram or Western Union is around 7.5% on the amount being transferred. For example, a customer will have to pay a fee of $7.5 for a transfer of $100. While it is not an amount which is too expensive for a convenience, on a large scale these funds add up to huge amounts when considering remittances done all over the world. Statistically, around $32 billion are accounted for as collective remittances which do not even reach the intended recipients due to unaffordable transaction fees and other charges, and that is a very huge number. Measures have been taken at international level to reduce the fee paid for remittances, which can result in billions of dollars being transferred, which would be gained by individuals and economies that need aid in terms of inward cash flow.
Due to complex anti money-laundering laws that govern them, and the fact that many money-transfer operators almost exclusively conduct businesses with impoverished areas of the globe, many established financial institutions have been shying away from working with such operators over the past years. As a result, the families residing in these countries which are in dire need of funds for their sustenance, have lead troubled lives. All this amount of general uncertainty with has made it necessary to come up with a system to create efficient, modern cross-border remittance system.
About 500mn strong skilled labour workforce flows into South East Asia alone every year, and every year this population is exploited. With lack of banking facilities, strange new working environments and culture, high exchange fees, presence of intermediaries, etc., there hasn’t been enough opportunity for their upliftment. Excessive rules and regulations are laid down by different countries and they vary from each other. Banks, money transfer unions, charge exorbitant fees and the unawareness of this population makes them easy victims. Beside futile paperwork and time constraints, the method is greatly susceptible to fraud. Layers of bureaucracy prevent these underbanked from getting financial services. LALA World aims to change that by creating various partnerships with governments, employers and remittance services to empower these migrants with LALA wallets, so that they can have easy access to their financial services. There are provisions to transfer fiat as well as crypto currency in real time and funds being available to the recipients almost instantly through LALA Card and PoS services. As a part of LALA Transfer, our technology team is also working on an internal order book system on Blockchain that will allow us to match cross border remittances flowing from one country to another. A truly, secure, decentralised order matching where one could transfer money at domestic rates and at negligible costs. A true disruption focussing on the underbanked and migrant community but a service that all of us can use anytime, anywhere.