Do you often make compromises? Conventional Money Transfers Vs Cashaa!
If you limit your choice only to what seems possible or reasonable, you disconnect yourself from what you truly want, and all that is left is a compromise — Robert Frit
The money transfer crossing borders dates back to barter system to its present form of electronic funds transfer called as Wire Transfer or Bank Transfer or Credit Transfer. Different Wire Transfer systems exists today to facilitate immediacy and finality of settlement and the cost, value, and volume of transactions. The Central banks such as Federal Reserves, RBI etc., provide various Wire Transfer Systems. The most widely used are the RTGS — Real Time Gross Settlement providing quickest way of real time and irrevocable settlements or the CHIPS — Clearing House Interbank Payments System provide net settlement on a periodic basis.
The first widely used and supposedly the oldest being the Telegraphic Transfer launched by Western Union in late 1800s used telegraphic networks.
So let’s take a reality check on cross border payments systems and how fast does it happens and how effectively it reaches the recipient. Effective here means how fast a settlement process happens since less time means less currency fluctuations while money is in transit.
A bank wire transfer generally goes through the flow as follows:
· First, the entity need to approach a bank to give the order to transfer money along with IBAN and BIC codes so the bank knows where and whom to send the money.
· The bank which accepts the order from the entity to send the money, transmits a message via secure system such as SWIFT or FedWire to the bank which is receiving the money.
· The message sent also contains settlement instructions and to note the fact that the actual money transfer is not instantaneous. Funds may take several hours to even days or more for the money to move from sender’s account to the receiver’s account.
· To further enable payment to the ultimate recipient the banks must hold a reciprocal amount with each other or the payment must be sent to a correspondent bank.
Now all these services include a Fee for their services which collects it from both the sender as well as from the recipient. The sending bank, the receiving bank and the intermediary bank all deducts separate fees from the money being transferred, thereby the recipient receives lesser amount than what the sender had sent.
Now let’s take a look at a few of the most common Money Transfer Remittance Companies / Wallet Services widely used and whether it could stand the future of Blockchain & revolutionary products such as CASHAA!
Western Union, is still by and large a widely used Money Transfer Operator (MTO) though Banks are an essential part of the remittance industry, as they provide the infrastructure that enables money transfers.
Western Union is used to send money and basically operates by deploying Western Union Agents worldwide. Typically a person who wishes to send money need to physically visit a Western Union Agent Location and complete the ‘Send Money’ process by providing the details of his own, recipient details, bank account details, purpose of money being sent and various other regulatory procedures according to the law of the land and AML guidelines to send money beyond the borders. The money transfer goes through banks and finally the recipient gets the information from the receiving Western Union Agent who then has to pick it up by providing required Identity details. A fee is deducted from the sender’s amount for the services provided for the money transfer.
Though these days, you can use the online services and mobile app provided by Western Union bypassing visiting a Western Union Agent location to Transfer money, it has its limitations of the size of funds and a considerable amount of Fee is being charged. It is estimated that on a average 7 to 8% of money goes as Fee in this huge remittance industry.
Moreover, while the Transaction fee is a greater concern by remittance companies even in genuine transactions, in certain countries or regions where monopoly prevail the fees for money transfer are also being artificially inflated.
Nevertheless, Western Union has been the oldest Money Transfer systems and its contribution to the remittance industry in the last century cannot be undermined.
The other biggest challenge in general are the common internet fraud by scammers such as the Advance Fee fraud and romance scammers who continue to receive funds via Money Transfer Systems confident in the knowledge that the money lost to overseas scammers is almost always unrecoverable. For this reason, several Money Transfer Operators are banned as a medium of payment through most online auction / shopping websites and discouraged in this arena as well. Many a times the remittance providers have also been accused of turning a blind eye to criminals using its services for Advance Fee Scams such as including offering fake job offers and lottery prizes, who were able to process transactions by giving the agents a share of the earnings from their scams. Also, when victims raise complaints, we see these systems fail to investigate those and leave them in vain. There have also been allegations of Money Laundering and terrorist funding and concerns that there is a lack of sufficient robust systems to train agents and monitor suspicious activity in respect of smaller transactions and to maintain appropriate records.
Now. Let’s a take a look at the Wallet based Payment Systems emerged in the last decade / few years such as the Paytm, Venmo etc.,
Paytm is primarily a leading payment gateway system between the customers and the merchants in Fiat Currency. It offers mobile bill payments, few other Utility bill payments using Bank Accounts or cards linked with Paytm. It has achieved considerable success in India wherein merchants can receive payments by having their customers / consumers just scan a QR Code. Especially smaller payments have been quite successful among small retail shops to mini businesses using Paytm.
However, the transfer happens between Paytm Wallets, meaning both the sender and receiver need to have Paytm Wallets enabling payments between them. Also, as far as their market is concerned the global presence is yet to come and presently available in India. This would mean that cross border payments is still on the cards for these Wallet transactions or is not made freely available to common users.
Venmo, another Wallet based service, is a secure way of Storing and Sharing payments with friends and Family and also make purchases. It is again a Wallet to Wallet transaction. It doesn’t offer any robust Cross border payments and one needs to have a US bank account to be linked with it.
The primary difference between Western Union and Paytm or Venmo is that you can store money in Paytm or Venmo Wallets, while the former is merely a money transfer system where funds cannot be stored or doesn’t offer wallet services.
Revoult Ltd on the other hand claims to send funds abroad with no fees using a Revoult Card at the real time exchange rate. It provides Wallet to store funds in GBP, USD, EUR as well and transfers can be seamlessly made within Europe. Revoult goes a step further and offers buying and exchanging of Cryptocurrency at best possible (catch word) exchange rate using its wallet. However, Global presence and worldwide adoption is limited to Europe.
Overall, this writing is not to show any present Transfer System or Services in low light, however to understand the limitations in terms of Time and cost / Fee, the Features and the Risks involved.
While we have seen what the key players in the Money Transfer System (MTOs) and Wallet Based Services offer, we as common man and users have to COMPROMISE on one thing or the other such as,
1. Lower Fees but longer time (even Days) to Transfer Money
2. Faster Transactions but Higher fees (even greater than 8 to 10% many a times when you need quick sending.
3. Limitation of Size of Funds — Amount of money that could be sent seamlessly without much hassles of KYC, regulatory delays etc.,
4. Exchange Rate fluctuations by the time the recipient receives the money.
5. Lower Fees, Faster Transactions, but services limited to few countries or a region.
6. Unable to store and spend money in the pure remittance based systems by Money Transfer Operators.
7. Able to Store, provide Utility services but Transactions happen only between Wallets and Cross Border Transactions is not a seamless process given the different regulations and laws in sender and receiver’s country. Often Wallet Services are great within the country and people have to look to Banks or MTOs / separate remittance services for cross border payments or Transfers.
8. Few wallets or Services does offer Cryptocurrency exchange, however the user is at the mercy of wallet provider’s own exchange rates and not according to the market rates.
9. The various Cryptocurrency Wallets available in the market doesn’t offer storing of various Fiat money into the same wallet and the very least they may provide exchange options.
10. Few Cryptocurrencies such as Ripple, Omisego, Xapo, Monaco or the Humaniq (though we aren’t discussing these in detail in this article), does provide inter bank settlement, Crypto payment network, Bitcoin based debit cards, storing of multi Cryptocurrencies, however each one lacking one service / feature or the other and cannot store or transfer Fiat / National currencies.
So, as life is full of compromises, the reality is that none of the global leaders in remittance / payment system or services or a product or a company that we have seen above could offer a ONE STOP SOLUTION for all these without any compromise or sacrifice rather on your money or services that you get or can use.
The future of “Transaction” as such is Blockchain be it money, realty (Land / Property), hospitality, Identity, shipping, maintaining records etc., The innumerable practical application of Blockchain is inevitable which would engulf almost everything into its system in the next decade.
Cashaa an ERC-20 based Crypto Token has been developing a single product which aims at “having to not compromise” on any of the above said services or features. Cashaa is setting up to be a Bank by itself and working torwards getting Global Banking License which could be a “SINGLE PRODUCT” OR “SINGLE PLACE” where a user could,
1. Transfer Money Globally from Anyone to Anywhere. Payments will be settled in 200+ countries in local currencies.
2. Transfer Money Globally at no extra cost, (Yes, at no extra fee, 0% Fee) therefore the recipient receives the exact amount the sender sends.
3. Transfer Money without compromise on time, yes it aims to complete the settlement within 30 minutes, 24/7 and round the year.
4. Store National / Fiat Currencies in Cashaa Wallet and Spend Anywhere in local currencies.
5. Store almost all Crypto Currencies from Bitcoin to Cashaa and Transfer, Spend anywhere in Crypto or local Fiat currencies. (Yes, you heard it correctly, both Fiat and Crypto in same Wallet).
6. Transactions on Blockchain, Tokenized, Completely digital and Secure.
7. Use the same Wallet to Store, Spend, Save and Receive.
8. Not to forget, Cashaa will be a Global Bank and hence you could lend or borrow and even get insured.
9. Make payments between Wallet to Wallet, any bank account, any currency / Virtual Currency / Token (Fiat or Crypto).
10. And the receiver and sender need not have any knowledge on Crypto Currency or Cashaa Token as such, by just using a Cashaa Mobile Wallet and a Cashaa Bank account you have all your local & global banking needs at your palm.
11. And all these you get within a strong KYC & AML policies and compliance framework so as to be compliant with respective law of the land and regulations.
The future of the next generation banking “CASHAA” aims to Bank the Unbanked globally and provide user a No-Compromise One Stop Solution for all your Banking Needs.
Cashaa founded by Kumar Gaurav, a Serial Entrepreneur is a tireless CEO who has already brought Cashaa under Top 100 most Influential Blockchain companies. Cashaa has formed a robust leadership & key advisory team of 200 years of banking & Fintech experience all put together. Cashaa Wallet and Banking Application are under development (Beta testing of the remittance systems has been successfully tested). Cashaa has been the most successful & Compliant ICO in 2018 and has rejected almost 14.1 Million dollars based on KYC non-compliance. The only ICO that has set a global standard & raised the bar on Legal Crowdfunding is Cashaa. This makes Cashaa’s Vision to be the Global Bank and One Stop Solution for all Banking needs be it Fiat or Crypto, is not hindered during various regulatory screening by countries across the globe.
Do you now really think you need to make any compromise? Do you think the conventional Wire Transfer Systems or Money Transfer Operators or the Digital Wallet Service providers present today stand a chance before Cashaa? I believe No, and if yes, it’s just until the Cashaa product goes live!