Remittances to Africa are expensive, Bitcoin remittances seize the opportunity

Editor's note: According to statistics, the African continent received a total of $32 billion in remittances in 2013, and this amount is expected to exceed $40 billion by 2016. It can be seen that Africans have a huge demand for remittances, especially African residents working abroad. However, the global remittance market extracts hundreds of millions of yuan in fees from the poorest people every year. Bitcoin remittances are low-cost and fast, providing a possibility for improving Africa's remittance system.

Bitcoin has demonstrated lower transaction costs in commodity transactions. It essentially provides a continuous, trusted, borderless payment transaction, whether the remittance is within the country or abroad, which can be completed in minutes and incur little to no fees (sometimes even zero fees).

Many people see the potential of Bitcoin in improving the African money transfer system. It can greatly reduce the costs for remittance providers and customers, which is partly due to the large amount of money required to finance the remittance costs of large cross-border trade. There are many cross-border transaction costs in terms of buildings, personnel, software systems and security, and many new trading platforms are trying to seize these markets.

M-Pesa is an example. They have been working to improve the way consumers manage their money. That's good news, but what if it's now even better? The fact is that the global remittance market chokes off billions of rands every year for some of the world's poorest people.

For example, Western Union, one of the most famous cross-border payment providers in South Africa, charges nearly 20% for the African market! This means that for every 1,000 rand, it will charge 200 rand!

Does Bitcoin have a chance?

维尔纳•罗延, head of business development at bitcoin company BitX, said:

"As more people use and accept Bitcoin, it creates a good return on investment in terms of usage and trust, which is good for the industry. From these points of view, we believe it will create a sensation and drive the stock index up."

Consumers at both ends of the wealth transaction have gradually seen the value of Bitcoin, as can be seen from the venture capital funds that the Bitcoin industry has received locally. BitX plays the role of a wallet and trading platform in the South African market, raising 50 million rand in just one round of fundraising. BitX is still a relatively new company in the African market. Similarly, Africa's technology and information technology development generally lags behind the world's top countries.

Many Bitcoin entrepreneurs are currently searching for some very famous Bitcoin killer applications that can make Bitcoin more widely and fiercely used. I want to ask you a question, what will happen if the Bitcoin killer application is promoted in the African remittance market?

Imagine if you could make payments across borders securely, without middlemen charging you fees! You don’t need to imagine, because this is reality! It just needs to be marketed, branded, and promoted so that everyone can easily enjoy this benefit.

Of course, we can undoubtedly see the reasons why Bitcoin should be used, but like all emerging technologies, what is it that has not yet been adopted by mainstream consumers?

Existing barriers

There are a number of reasons why Bitcoin has not yet been accepted by the majority of society:

1. New technologies, especially those linked to banking and finance, require very high credit limits.

2. Compared with the wealth system, Bitcoin is not so easy to complete transactions because it is a new technology. However, R&D personnel and venture capitalists around the world are working hard to make the current transaction technology simpler and more efficient.

3. The absence of tariffs or government regulations is also a problem, making it uncertain for investors and businessmen what kind of environment they will have to compete with each other in the future.

What do you think? Do you think Bitcoin is the future of the remittance market? If not, what do you think is the reason why it cannot replace the current wealth system?

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Original article: http://bitcoinhub.co.za/is-bitcoin-the-future-of-remmitances-in-africa/
By Laura Shin
Translator: Wang Er
BTC address: 16enj2bapYdzPfa2DWSVaT1g95MCXg2hHt
Editor: printemps
Source (translation): Babbitt Information (http://www.8btc.com/bitcoin-future-in-africa ‎)