The international system of remittances show great interest in the blockchain and cryptocurrency, moving from testing and research for the full crypto-translation, for an audience of millions. So, in early April, the largest money transfer system in the world, Western Union has entered into cooperation with cross-border payment network Thunes blockchain and the Philippine startup Coins.ph. Together, they will launch a service that will allow customers to transfer money to mobile wallets of other users around the world. In addition to Western Union, blockchain test MoneyGram, PayPal and other payment systems. Figured out what caused their interest in advanced technology and how soon they can start the transfer of cryptocurrency.
The Western Union company has long kept an eye on the blockchain and cryptocurrencies, but until recently on this front has not been significant progress. In 2018, the service announced the beginning of cooperation with Ripple «to check whether to send payments via the blockchain faster and cheaper,» traditional translations. Then the company is not found in the blockchain is nothing revolutionary. Moreover, in June 2018, the Director General of Western Union, Hikmet Ersek said that support cryptocurrencies in the coming years will not be added. According to him, users do not pay their account — transactions in Fiat currency will always dominate the cryptocurrency.
However, by the end of last year, the situation began to change. So, in December 2018 President of Western Union’s Odilon Almeida said that the company is potentially ready to accept any currency, including crypto, because there is a big difference between digital coins and other payment instruments handled by the company. The service was ready for such a step at any time, but will do it only when you decide that it is right. Now Western Union is invested in the search for financial apps that would fit the company. «Cryptocurrency can become another option for the exchange of assets between people and countries. If this happens, we will be ready to launch,» said Almeida.
In February 2019, the General Manager of Western Union in the Asia-Pacific region Molly Shi said that customers expect from the company’s seamless service, which will be as fast as other digital applications that they already have. According to her, the company continues to test a set of payment solutions the Ripple — for example, the transaction currency pair dollar/pesos — as well as exploring opportunities xRapid (payment platform from Ripple). Shi added that the options that they choose should be legitimate and widely acceptable for mass.
«Cryptocurrency is a lot of hype. Well, that we transfer money into a digital format for almost two decades».
In March 2019, the Western Union company has announced the cooperation with the project Thunes — cross-border payment network focused on emerging markets. Now customers of Western Union can transfer money to mobile wallets of users around the world. This should stimulate the introduction of cryptocurrencies in the regions devoid of the traditional financial services, and provide access to them for those who, for one reason or another did not use them previously.
In April, 2019 Western Union has entered into cooperation with the Philippine blockchain startup Coins.ph — one of the leading providers of e-wallets in the Philippines and in Thailand, which has 5 million customers and obtained the license of the Philippine Central Bank as Issuer of the digital currency and electronic money. Together, they will launch service for the implementation of domestic and international transfers directly into cryptocurrency wallets Coins.ph. According to the world Bank, the Philippines is one of the largest recipient countries of remittances in the world. Up to 10 million Filipinos working abroad, they do not have Bank accounts, but they regularly send money to their family. Only in 2018, they transferred $32 billion.
Send money to the purse of Coins.ph using Western Union is very simple. The client passes verification and receives the ability to send every month up to 100,000 Philippine pesos (approximately $1907). The sender transfers money through Western Union and reports to the recipient the reference number and the transfer amount, and the recipient enters them in the app Coins.ph. So, the money credited to the account.
Interface Coins.ph when you transfer via Western Union. Source.The procedure for money transaction from Western Union. Source.
The Western Union company is not alone in its quest to implement blockchain — the system only follows the General trend. In 2018, the Ripple has started cooperation with the Mexican translation service Cuallix. In 2019, the company’s CFO Nicolas Palacios said that «xRapid provides great benefits to recipients of cross-border payments in Mexico».
In January 2018 on cooperation with the Ripple reported second popular after Western Union money transfer service — MoneyGram. The company tested XRP international transfers within its network. It was originally planned that this cryptocurrency will increase transaction speed and reduce costs.
The latest news about the test was in November — the service announced that is testing Ripple xRapid for international processes within the country, not intended for users. Source.
Also in January of last year about testing xRapid announced providers of international payment transfers Mercury FX and IDT Corporation. In February, 2019 Mercury FX on the basis of xRapid has launched a payment corridor between Mexico and the Philippines and plans to launch before the end of the year 10 more of these corridors. Now the transaction volume is tens of thousands of dollars a week. The representatives of IDT Corporation in January 2019, said that the test xRapid exceeded their expectations, and the company is going to create a new product based on the technology. According to them, the average transaction time was 1 minute 53 seconds.
As for the other blockchain platforms, in April this year, PayPal has invested in Cambridge Blockchain startup that provides financial institutions services for storage and verification of sensitive data with the blockchain. The amount of investment is unknown, but, according to information filed with the Commission on securities and exchange Commission (SEC), Cambridge Blockchain has attracted several investors, only about $3.5 million. According to representatives of the company, while it is not a commercial project and the study.
Obviously, payment services follow the General trend in the blockchain to keep up in the technological race and stay afloat.
Payment of services there are several reasons to begin to cooperate with the blockchain projects:
The increase in turnover. Payment services earn a percentage of transfers. No matter what they are expressed in Fiat or cryptocurrency — the more trading volume, the greater the profit.
Services expansion. For payment services the opportunity to work with cryptocurrencies and bloccano will reduce transaction costs, increase trust among participants in the settlement process and, as a consequence — to expand customer base. «For the payment systems, of course, is a huge advantage in terms of reduction of costs and transparency of operations. Cost reduction can be achieved through full automation of processes and the lack of inspectors and tellers on the steps of the transaction,» said Andrei Bekarev, the founder of the crypto-platform Apatris.
The blockchain search for the optimal solution. Pay closely to stock market and carefully select the optimal blockchain solution. «While it is impossible to predict what the blockchain-a platform will be crucial in the financial services market. So now the payment services should be most responsible approach to the choice of one or other solution so you do not have to spend money to transition to the new platform. Accordingly, those platforms that are now out payment services for the launch of pilot projects on the blockchain can be considered as the most developed and practically oriented,» — said Valery Petrov, Vice-President of the Russian Association of crypto-industry and the blockchain (RAKIB) for development and regulation of the market.
In the investment environment, there is the hypothesis that cross-border transactions on the blockchain will be much cheaper than traditional. This assumption is now experimentally verified. «The last deal definitely suggests that investors are most interested in blockchain technology, rather than offering it as such — they are familiar to people handling cards or other payment instruments. Ripple due to its speed closer to the ideal, but even it does not correspond to the expectations of users,» said Petr Koziakov, Director of development Mercuryo.io.
Therefore it is difficult to name exact date of the launch of cryptocurrency payment transfers among giants, but there is reason to believe that Western Union and other payment services in the near future will offer its users crypto-transfers. Even those tentative experiments which we see today are the actual recognition of blockchain payment technology and provide a Foundation for development.
Payment services don’t want to fall behind in the technological race, but not in a hurry to rebuild first. It is obvious that investing in crypto-projects and the start-up of transfers in developing countries is negligible for the payment giants, remitting billions of dollars. None of them are not yet ready for large-scale investments in crypto projects, adding them to your functions and restructuring of the payment infrastructure, as the market for crypto-currency transfers are still very narrow, volatile and uncontrolled. And for this small piece of the pie fighting dozens of alternative services, is completely unknown which of them will win in this fight. «In this situation, payment for services, it is now critical that as quickly as possible to take this niche to be among the leaders in a time when the crypto-assets will become a daily need,» said Valery Petrov, Vice-President RAKIB for development and regulation of the market.
Before the payment services will finally accept the cryptocurrency, those should solve the problem with the volatility, lack of regulation and become more reliable and ubiquitous. «As soon as legislators to determine the areas where crypto-assets can legally be used without risks to the monetary system or the possibility of any illegal their use is possible with high probability to predict the explosive growth in the use of blockchain technology in systems of mutual settlements», — summed up Valeri Petrov.