Blockchain Helps to Build Inclusive Finance Through Cost-Effective Cash Transfer

“Bitcoin and blockchain technology enable numerous possibilities to build a truly fair and inclusive financial system,” Kumar Guarav, Founder of Cashaa/Auxesis Group, tells me for MaxKeiser.com. “International money transfer, with which we have started, both for individuals and businesses, has frequently been mentioned as Bitcoin’s strongest use case. It is one particular area where currently banks and institutions are charging fees that are way above what is acceptable for most people.”

Global remittances are worth $540bn/year, with India being the largest recipient country overall, and Nigeria being Africa’s largest recipient country. In the corridors where Cashaa has launched – UK to India and UK to Nigeria – overall remittance volume has reached $3.9bn and $3.7bn, respectively. The World Bank conjectures a $250 cross-border transaction requires $15-$30 in fees.

“With us, this fee is replaced with a 1£ flat fee on any transaction, and senders and receivers get the best exchange rate. In this way, individuals in emerging markets will receive more money,” says Mr. Guarav. “Bitcoin is used for international transfer without the sender or receiver having to know anything about it. We open global markets for traders, using the liquidity from the cash remittance industry to connect local traders in different countries. Now traders can find a trade without the physical presence of their counterpart in the same location, and Bitcoin trading gets a new, real life purpose, enabling international money transfer, instead of only being used for speculation.”

Western Union, MoneyGram and Ria cash-transfer services can charge up to 50% on fees collected by their agents. Cashaa agents only need to pay the 1 £ flat fee per transaction, and any other fee they charge from the sender is up to them. “So, they can become cheaper than their competition, but still make more money because they do not have to pay any percentage to us,” says Guarav.

Senders and receivers save money on fees and exchange rates, while Cashaa profits from charging a percentage of the traders’ profit. Additionally, Cashaa also includes a local peer-to-peer Bitcoin trading platform which has users from 141 countries, and is going to charge fees from additional services such as e-commerce, mobile top-ups or bill payments.

“Cashaa provides cash-to-bank and bank-to-bank transfers,” Mr. Guarav describes. “By including cash on the sender’s side for transfers from London, we are directly competing with companies like Western Union which are handling cash, unlike other Bitcoin-using remittance companies which are only including bank to bank transfer.”

He adds: “In Cashaa, the Bitcoin part is completely in the background, enabling any sender to benefit from Bitcoin in the most easy way without having to know about it.”

This Max Keiser exclusive article was written by Justin O’Connell, a financial technology researcher focusing on blockchain. He founded the companies Gold Silver Bitcoin and Cryptographic Asset, as well as helped to launch the largest Bitcoin ATM software provider in the world. His work has appeared in Bitcoin Magazine, Coin Desk, Crypto Coins News, Hacked, Merry Jane, NASDAQ and VICE.