Remittances are an important way to support the national economy in areas where financial difficulties are relatively common. Several regions of the world depend on these money transfers, but the COVID-19 pandemic is causing a problem. Sub-Saharan countries run the risk of losing even more remittances from emigrants.
The current panorama of remittances
For many immigrants seeking wealth elsewhere, sending money to friends and family is a way of life. In sub-Saharan Africa, remittance flows are a crucial aspect of local economic growth. Without that money from emigrants, many people would face significant financial difficulties over a long period of time.
As most African migrants try to work in Europe, North America, the Middle East and Asia, they are now at financial risk. Many migrants lose their jobs or face pay cuts due to the current COVID-19 pandemic, leaving them less money in their pocket to send home. While remittances to sub-Saharan Africa totaled $ 48 billion in 2019, that number may have dropped to less than $ 38 billion in 2020 due to COVID-19. A decline that is expected, as global remittances fell sharply in 2020.
What makes matters worse is the high cost that is still associated with sending money. Although these costs decreased from 2011 to 2018, they are still more than 9% of the amount sent to sub-Saharan Africa. Other regions have to deal with shipping rates of 6% to 8%, and Latin America and the Caribbean even saw an increase in average costs.
Are cryptocurrencies the solution?
On paper, cryptocurrencies such as Bitcoin can represent a significant improvement over traditional remittance solutions. It is a cheaper option to move money anywhere in the world, and one can receive the money through any device connected to the Internet without having to leave home or have a bank account. Most importantly, the recipient of the funds will have full control of the funds, assuming they have the private key of their Bitcoin wallet.
There is also the aspect of eliminating the need for any middle man. With cryptocurrencies and the blockchain, all transactions are made directly between the sender and the receiver. This not only eliminates friction, but also creates a more effective system.
Despite criticism that Bitcoin is a “slow” network, transactions typically take an hour or less to fully confirm. In the case of remittances, it is not uncommon to wait days or even a whole week until the money arrives from the other side of the world. From an efficiency point of view, cryptocurrencies offer many advantages, although they are not always too easy for newbies to use.
CoinZoom offers a solution
To change that narrative, more intuitive products and services are needed for remittance solutions. CoinZoom offers many useful functionalities in this regard. Its Zoomme service is known as the “Venmo of cryptocurrencies”, and it makes it easy to send and receive money to anyone in the world without having to pay any commission. As a peer-to-peer crypto and fiat sending system, all CoinZoom clients can send USD or crypto internationally immediately.
ZoomMe gives cryptocurrencies an additional purpose and does so without charging any fees or introducing hidden fees. It is a very simple and straightforward system that does not require a special permit to use. The limits on the amount of money that can be sent through ZoomMe depend on the number of ZOOM tokens you have. There are several different levels, each of which has its own requirements.
Unlike traditional remittance providers, CoinZoom can provide a frictionless and sentiment free money transfer solution globally. It has done so by adopting blockchain technology and cryptocurrencies, two forms of technology that any company can incorporate into its service today. The big question is whether traditional remittance providers will explore this option or continue to charge hefty fees for moving funds digitally from one account to another.
Being able to send money around the world at no additional cost and without relying on a centralized infrastructure can make a world of difference for millions of people. Even in sub-Saharan Africa, many people have computers or mobile devices that can accept cryptocurrency transactions. ZoomMe empowers all of these individuals, regardless of their current access to financial products and services.