MarilynJean Media Interactive (MJMI.qb) announced on July 24 plans to enter the lucrative international remittance market using bitcoin. MJMI is one of the first publicly traded companies to shift focus exclusively to the bitcoin and cryptocurrency space and will be the first such company to offer international money transfer.
Multi-Billion Dollar Industry
According to figures from the World Bank, money worth in excess of US$580 billion was sent internationally last year, and this is expected to rise to over US$608 billion in 2015. With estimated transaction fees averaging nearly 8%, this equates to an almost US$50 billion market.
The majority of remittance transfers are sent from migrant workers in developed countries back home to family in developing ones with India and China being by far the biggest recipient countries by remittance value. In fact remittances sent home by migrants to developing countries are equivalent to more than three times the size of official development assistance.
International remittances are readily available through banks and foreign exchange brokers although these often require bank to bank transfers. The fact that many recipients have no access to a bank account has led to the dominance of high street firms such as Moneygram and Western Union.
These companies charge high transaction fees to send and receive money, and make additional profit through hidden costs attributable to non-competitive exchange rates.
The Benefit of Bitcoin
A Bitcoin remittance transaction would involve purchase via a bitcoin exchange and transfer to a bitcoin remittance company who would then send the money to the recipient. Typically this would be completed in a matter of minutes and limit fees to around 2% of the transaction value.
In addition, this can be easily completed using mobile devices, making it far more accessible in developing countries where mobile phones are often considered a greater necessity than a bank account.
MJMI is certainly not the first company to consider the potential of Bitcoin in the remittance industry, with several start-ups such as SimbaPay or Bitspark offering the service to limited destinations, and sites like rebittance.org acting as a portal for these.
One of the challenges for cryptocurrencies in the remittance market however, has been the differing international regulations and costs for compliance. MJMI believe that, as a fully reporting, publicly traded company, both regulators and users will be more confident with their participation in regulated markets.
The company is currently pursuing several verticals within the crypto-currency space, including partnerships with an established bitcoin exchange and bitcoin ATM manufacturers. It plans to integrate these services directly with its trading platform, thus providing a seamless end to end solution for remittances either online, via mobile or in person at an ATM.
Company President, Peter Janosi said:
“With legacy remittance companies and traditional banks continuing to charge high fees while hiding other fees via poor exchange rates, it's hard to see a future where they will continue to be relevant.”