Bitcoin is a disruptive technology.
If Western Union and other Remitters do nothing, they will eventually lose a little market share: Once both the sender and the receiver figure out how to use Bitcoin, they will start remitting to each other directly in Bitcoin, and save on fees walk by away from the existing Remitters. Luckily for the Remitters, current wallets are so intimidating to non-technical people, that this day is far, far away. And the receivers are many times unable or unwilling to learn new terminology.
Counter-intuitively, the Remitters can actually benefit from the Bitcoin technology for two reasons:
If Western Union and other Remitters do nothing, they will eventually lose a little market share: Once both the sender and the receiver figure out how to use Bitcoin, they will start remitting to each other directly in Bitcoin, and save on fees walk by away from the existing Remitters. Luckily for the Remitters, current wallets are so intimidating to non-technical people, that this day is far, far away. And the receivers are many times unable or unwilling to learn new terminology.
Counter-intuitively, the Remitters can actually benefit from the Bitcoin technology for two reasons:
1. These businesses already have in their customer database most of the people who currently send and receive remittances.
2. These businesses already have researched and complied with all the Anti-Money Laundering (“AML”) laws, and have established robust and well-functioning “Know-Your-Customer” (“KYC”) procedures.
With such a head start, the Remitters can seize the opportunity as follows: they can partner with a 3rd Party Bitcoin Service Provider (BSP) right away, and offer to accept or remit money in Bitcoin.
No risk:
The window of this opportunity will stay open for as long as the sender and the receiver for each transaction do not both learn how to use Bitcoin. If current senders can remit in Bitcoin, sending a remittance saves them a trip, and thus are less motivated to urge their receiver to implement bitcoin.
This co-operation is beneficial to the BSPs as well, as they get to serve an existing remittance market without having to vet each one for AML and KYC.
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No risk:
- The Remitters never need risk exposure to Bitcoin’s price volatility: The BSP will absorb all that.
- The Remitters never need depend on the BSP: They can caveat the service as “while supplies last”. So if the BSP does not deliver, they stop delivering as well.
Advantages
- The Remitters can collect fixed-amount or %-based fees from their customers for converting to/from Bitcoin, higher than what it costs them to transact with the back-end BSP.
- The Remitters can aggregate buy/sell transactions, so their cost to the BSP is only the net Bitcoin converted; not the gross.
The window of this opportunity will stay open for as long as the sender and the receiver for each transaction do not both learn how to use Bitcoin. If current senders can remit in Bitcoin, sending a remittance saves them a trip, and thus are less motivated to urge their receiver to implement bitcoin.
This co-operation is beneficial to the BSPs as well, as they get to serve an existing remittance market without having to vet each one for AML and KYC.
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