How can the broken global remittance system be fixed?
Did you know, that more than $688 billion were sent home by migrant workers from around the world in 2018? Well, according to the World Bank report that is true. With such whopping numbers, it is still a shame that the costs of money transferring burns a hole in senders’ pockets. The global average cost of sending $200 was 6.9%, according to the last count in the third quarter of 2018.
The World Bank is looking for hero-like companies in a struggle with commissions and supposes to reduce them to 3%. Such justice by the moment can be provided only by blockchain based businesses. The Noah Project is among the first game changers to solve the issue.
Now important the remittance for the global economy.
When the world economy is blurring geographical borders, skilled and unskilled workers are moving across national boundaries in an effort to find work and a decent means of livelihood. A major part of the money they earn is sent back home as remittances that play a substantial part in helping the local economies.
The Asia and Pacific region has been contributing to the global remittances market very strongly. Today, one in every three migrants comes from Asia. 80 million people from Asia live and work in foreign countries. In 2018, transfer of funds East Asian countries, for instance, was 6% more than the previous year and was at $142 billion. Funds transfer to South Asia increased by 13.5% at $132 billion.
According to the World Bank, even with a bearish economy, money transfers will increase by an annual rate of 4% and play their vital role in the upliftment of the local economy.
What ails the global remittance markets?
In this regard, the words of Mr. Mahmoud Mohieldin, Senior VP at the World Bank, are pretty significant “Even with technological advances, remittances fees remain too high…. Use of low-cost technologies will ease the burden on poorer customers.” This is an admission by the global bank that the international remittance system has a lot of scope for improvement. And this is where FinTech driven by blockchain can help immensely.
As earlier noted, South Asia, the biggest remittance market, is hampered by high fees, delayed transactions and non-penetration of FinTech capabilities to ease the burden on migrants to transfer their salaries. The Philippines, for example, receives close to $30 billion a year from more than 10 million migrant Filipinos. And yet they have to face an underdeveloped payment infrastructure and costs between 6 and 10% to send their money.
The Noah Project a new hero to save the remittances markets in South Asia
There is a transactions platform at the heart of the Noah Project. You might ask yourself a question- what benefits will it bring? The answer is simple, this platform will ease the burden of hardworking migrant answers in sending remittances to their loved once back home.
Through the Noah ecosystem, expat workers can use the power of cryptocurrencies and the speed, security and zero-trust capabilities of the blockchain to allow near real-time transactions of funds. By converting fiat into Noah Coin and instantly transferring them between wallets, individuals pay only a fraction of the fees that they previously used to. Add to it state-of-the-art security measures and the infallibility of the blockchain and you have a system that is robust, fast and safe.
Noah Wallet is easy to use, intuitive and surely will be appreciated by everyone who wants to make fast, convenient transfers or cheap remittances to their families at home. The fees will be around 2–3%. Noah Wallet is available for Android and iOS devices.
How the remittances market will shape up in the future
Remittances have proven to have a major impact on the national economy, especially of smaller countries. Money received by individual countries from their diaspora forms a substantial chunk of their GDP. For small countries, like Tonga, for instance, the number of payments sent by migrant workers amounted to almost 35% of their annual GDP.
Technology needs to be utilized to the fullest in making the movement of money as seamless and effortless as possible so that it keeps on fuelling the engines of the global economy. To ensure its smooth and swift movement, the Noah Project is utilizing cutting-edge fintech powered by blockchain and is playing its role to lessen the burden of increased costs for migrant workers who wish to send money back home.
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