Online remittance costs
Banks vs. online platforms
Without a doubt, it’s much cheaper to use independent online platforms to send money internationally rather than your regular mainstream bank. Banks have already lost the battle for affordable international transfers. Such transfer costs on average $25 and can take 5 days to be delivered. Meanwhile, online platforms allow you to send money for $5 with possible options for extra fast delivery.
The main disadvantage of the remittance platforms is that there are so many variables and factors which impact the transfer costs, which makes it hard to calculate the final price. There are platforms such as Wirly.com, which can help you calculate the transfer costs and compare them with different alternatives. The variety of different available offers makes it also hard to choose the right service.
Average online remittance fees
When calculating the costs one have to take into the consideration transfer fees, but also exchange rates. Many companies offer cheap transfers, but put high markup on the currency exchange rates, which adds up to the final costs.
The transfers also depend on the amount and recipient’s location. Sending 100USD and exchanging it into EUR through TransferWise platform would cost only $1.71. Now, sending the same amount through PayPal costs around $4.99. You can see that there are huge differences between different platforms.
Sending money cheaper with crypto?
Recently, there is a growing interest in the new type of digital money. Cryptocurrencies are special internet-based coins, which are extremely secure and fast to send. You might have heard about Bitcoin, which is the most popular and first cryptocurrency.
Cryptocurrency transfer fees
Based on the data gathered by Wirly.com platform, which specializes in researching money transfer cost information, these are the average transfer fees for most popular cryptocurrencies:
- Bitcoin: $1.19
- Ethereum: $0.122
- XRP: $0.00016
- Litecoin: $0.017
- Bitcoin Cash: $0.0025
- Bitcoin SV: $0.00045
- Monero: $0.014
You can easily notice how cheap it is to send even the largest amounts of money through crypto, compared to the bank wire or online remittance costs. However, because of the many obstacles and factors, which make it hard for cryptocurrencies to be widely adopted yet, cheap transfers can’t make up for the utility of these coins.
Problems with crypto transfers
It is still inconvenient to store any significant amount of money in crypto, as the rapid price fluctuations can decimate your wealth in a matter of hours. We have already seen price jumping up and down by 200% a day. Moreover, the lack of official acknowledgement or government regulations take away from the reliability of these digital coins. This technology is still quite new and we are just starting to benefit from the potentially instant and almost free information and money transfers.
Blockchain technology in modern finances
RippleNet and mainstream banks
However, the sole blockchain technology which is used to create these coins, is being slowly adopted by mainstream financial institutions. There are companies such as Ripple who bring the benefits of blockchain technology to mainstream banks and other institutions. They’ve created a network, which can compete against SWIFT, which is the current industry standard. There are already some big companies testing it out. It is also being used by some remittance platforms, as it helps them establish safe connections and offer their services on a global scale.
The future of finances
We don’t know yet, which direction will the remittance trend go. Will cryptocurrencies become the leading currencies of the world? Maybe only the blockchain technology behind them will be used for our everyday banking. There are already platforms who experiment and try to benefit from this new technology to provide cheaper and faster money transfer services. The whole market is still developing.