Emerging crypto for cross-border remittances
PYMNTS research reveals that nearly 60% of consumers who send cross-border remittances in the past year have increased those payments as part of the pandemic and, with US consumers sending some $ 76 billion a year in sending money to people in other countries, the potential to reduce the cost of these payments while increasing their speed is too tempting to ignore.
As more people turn to blockchain and cryptocurrencies to dramatically improve the cost and speed of cross-border payments, PYMNTS researchers surveyed nearly 2,100 consumers on the topic and found significant interest. for the adoption of crypto remittances.
For example, The Digital Currency Shift: The Cross-Border Remittances Report, produced in collaboration with Foundation for Stellar Development and PYMNTS, found that 70% of consumers pay a fee to send money abroad, â41% pay a 6.2% percentage fee on average and 28% a flat fee of $ 14.80 on average. In total, the cost to American consumers is $ 3.5 billion. While 30% of those surveyed said they don’t pay fees, they can pay currency exchange fees. “
Those who adopt cryptocurrencies for remittances report a different experience.
According to the results of the study, “23% of respondents – representing 8 million adults – who have made payments online to friends or family members in other countries have used at least one type of cryptocurrency. In fact, 13% of consumers surveyed say cryptocurrency was their most popular payment method for cross-border remittances online.
Read: The Digital Currency Shift: The Cross-Border Remittances Report
Crypto holders love it for remittances
While PayPal, credit cards, and wire transfers are most often used for sending money, the use of cryptocurrency is increasing due to its unique attributes for cross-border uses.
Owning a cryptocurrency increases the likelihood of using it for cross-border payments, as one would expect, and the growing population of cryptocurrency holders is driving the trend.
According to the study, âFifty-one percent of consumers making cross-border P2P payments currently hold cryptocurrency, compared to around 12% of the general US population. Almost half of these consumers have purchased cryptocurrency for transactions of any kind. This is not surprising, as consumers who need to send money quickly are likely to favor options that allow them to transfer money instantly and fund their payments in a variety of ways that are convenient for them.
See more: The Digital Currency Shift: The Cross-Border Remittances Report
Trust and choice influencing cross-border use of crypto
Trust underpins the entire financial system, and cryptocurrency is no different. Trust is the deciding factor in how consumers send peer-to-peer (P2P) funds.
As the study states, âAmong consumers who make payments using cryptocurrency, trust in their PSP brand name is important. Almost two-thirds of cryptocurrency holders see a significant increase in their level of confidence in their cross-border payments due to the transfer service’s brand, compared to 52% among non-cryptocurrency users.
However, up to 24% of consumers said they would “choose a specific provider if receiving cryptocurrency payments was available, and 22% would if cryptocurrency payments were available.” These percentages range up to 45% (receiving payments in cryptocurrency) and 50% (making payments in cryptocurrency) among those who already make cross-border P2P payments in cryptocurrency.
See: The Digital Currency Shift: The Cross-Border Remittances Report