Can cryptocurrencies replace regular money transfers?

Published: 26/11/2019 | Last Updated: 06/04/2020

Can cryptocurrencies replace regular money transfers?

With the development of blockchain technology, many people wonder if this is the future of our finances and money transfers or is it just a temporary phase? Will blockchain technology enhance today’s banks or replace it fully?

International bank wire costs

It’s no secret that banks overcharge their clients for many services. Ordering an international money transfer costs on average $20. Let’s take a look at Nationwide, which is the seventh largest cooperative financial institution in the world. SEPA transfer, which covers only European countries costs $12, while any other international payment yields fees of $25. It’s nothing too surprising. Barclays Bank, which is one of the leading UK’s banks mentions to their users that if the sender doesn’t pay a special fee, you may even be charged just to receive money to your account.

Online remittance prices

An increasing demand for cheap international money transfers have sparked the development of online remittance market. There are thousands of offers from various types of transfer platforms. The companies there vary significantly. Some well-known payment processors and financial giants like PayPal also count to this category. You can easily send a quick payment and exchange the currency for only a few dollars with PayPal. Many online business owners already use it to handle the payments from their international clients.

But there are also platforms, which specialize in providing money transfers for particular regions or countries. For example, EasySend has established a good connection for processing transfers specifically between Poland and the UK. While their service is limited only to few countries, their rates are significantly better than the rates from huge worldwide platforms.

Cryptocurrency transfers

Here we move to the most interesting transfer method, which was brought by blockchain technology. Cryptocurrencies, which are digital coins, can easily carry value and be exchanged between people. Moreover, the technology allows to send them from one wallet to another for literally a few cents. What’s more, the transaction is delivered within a few seconds. Sounds too good to be true? Well, the technology is already out there and you check for yourself. There are obviously some drawbacks and limitations, which prevent the global adoption at this moment.

The major problem is the price stability of these currencies. As it’s a very young and still developing market, the values of the coins change rapidly each day. Therefore, it’s inconvenient to hold them, as you can’t really be sure if your coins will be worth the same tomorrow’s morning.

Another drawback comes from the technology itself. As for some people, especially the older generation, it may be too complicated to grasp the idea of digital currency, which you can send yourself without any bank or other kind of governor. You are in a way your own bank. Therefore, there is no customer service, which can help you if you forget your password or send money to a wrong account.

Remittance platforms benefit from blockchain

A good news is that currently, there is no ongoing battle for the place of main money transfer method. In fact, blockchain technology has significantly improved efficiency of some of the remittance platforms and allowed them to send the money faster and cheaper. These companies report that by incorporating the blockchain solutions they could extend their services for new countries and manage the network of connections more efficiently.

Which is the best method to send money online?

Well, as cryptocurrencies haven’t matured yet to the point of being widely adopted, it still seems that online money transfer platforms are the most cost-efficient option. Maybe in the future, as more people start learning about crypto transfers, this method will become more popular. The current problem people may want to solve is how to send money the cheapest and fastest with the available remittance platforms? And with the thousands of offers available which one to choose?

Even a quick google search of phrase such as “send money online” gives out millions of entries. Because of that, platforms like for example Wirly.com emerged. They cover all of the fees and potential hidden costs and show you how much you will pay for a particular transfer at a platform of your choice. As some currencies are cheaper to exchange and transfer, you can easily try out different configurations to find out the best rates.