- The new tech could see a reduction in transaction fees
- Spike in Bitcoin has affected the market
The research director for worldwide international payments at a premier global provider of market intelligence for the information tech, telecommunications and consumer technology markets has hinted that blockchain has the potential to make money transfers, including cross-border payments, far less costly and more efficient in 2018.
James Wester of the prestigious International Data Corporation (IDC) has told Investor’s Business Daily journalist Bill Peters that he will be keeping a close eye on blockchain’s capacity for cheaper and more effective money transfers this year.
In 2016, in excess of USD $400bn (AUD $505bn) were transacted in international money transfers across the globe. On average, transaction fees hovered around a level of 7%. But some disruptive new blockchain startups in the international payments space are beginning to send shivers down the spines of traditional wire transfer businesses (like Western Union) as a direct consequence of the increasing commercial uptake of the Bitcoin cryptocurrency.
The latter include TransferWise, Abra and Circle. As Wester puts it: “It also looks like a use case that could be on the point of really taking off in ways that I don't think other use cases are.”
Close watchers of the cryptocurrency international payments space have sat bolt upright at recent developments between MoneyGram and cryptocurrency Ripple. The former last week announced that it would test the latter to transfer funds.
Crypto money transfers, of course, come with fees, as all remittance platforms do. But some cross-border payments fees are notably higher than others, and one of the appeals of blockchain to money transfers companies is that they can use it for payments in cryptocurrencies other than Bitcoin.
Matthew Spoke, CEO of blockchain startup Nuco Networks, told Investors Business Daily: “I think in 2018 you're going to see a lot of these new projects that have been promoting themselves and raising money (in 2017), many of them are going to see their first real releases of software, official releases of their platform, happening in 2018.”
