Cryptocurrency has had a profound impact on almost every industry in the world because of its versatility, scalability, and ease of implementation. As more and more people rely on crypto, the changing and ever-growing remittance industry is no different now, either.

The US is currently the largest source of international remittances after the UK, sending over $56.3 billion in 2015 and over $100 billion in 2019 worldwide. This shows just how quickly the demand for remittances is increasing and how remittance businesses are gaining ground.

One major issue faced by all those who send remittance out is transfer fees, speed of funds being transferred, and most importantly, security. Remittance businesses and banks are looking for newer ways to speed up the remittance process and get a unique edge over the competitors, and the answer lies in crypto merchant accounts.

Using Cryptocurrency for Remittance – How It Works

The US and especially the UK are seeing a rapid increase in the number of migrations. While some manage to come with their family, others aren’t so lucky. Whether it’s an engineer, accountant, artist, or any other professional, they support their families by sending remittances back to their home country.

Remittance is the transmission of currency (usually from one country to another) such that it isn’t tied to any commercial exchange. Remittance may be for family support or be sent as a gift. According to the World Bank, over 800 million people depend solely on remittance income, and the situation left in the wake of COVID 19 suggests that remittance flows will increase significantly by 2026.

The process is quite simple; customers come to remittance companies that accept dollars, convert it into the currency local to the recipient country, and then transfer it to the target account. During the process, customers have to pay the companies’ profit margin, currency exchange fees, bank transfer charges, and taxes (in some instances).

The process can be quite lengthy and take a few hours to a few days to complete.

The Remittance Industry On The Rise: How Crypto Has Improved The Industry

Cryptocurrency comes in to make things easier for remittance companies and those looking to transfer their funds by eliminating the involvement (and therefore fees) of banks. It’s fast, secure, and there are no exchange fees to deal with, either.

In 2018, over 15% of total remittances sent from the US and UK were sent via crypto, a figure that experts believe will soon rise. For remittance companies to facilitate clients and help them make the most out of their currency, crypto merchant accounts need to be implemented before the concept becomes even more mainstream.

Use of Crypto Remittances & Merchant Accounts in Businesses

Cost

There are many reasons why crypto merchant accounts are preferred by customers and many remittance companies, as mentioned above. In the United States, the average cost of sending remittances in the fourth quarter of 2020 stood at 5.22% of the total transaction. This is a considerable amount, especially for people sending remittances to third-world countries.

Some companies also charge a premium (about 10% of total costs) for quicker service, a service that crypto merchant accounts can do faster and with lower costs! The reduced costs represent one of the leading causes for remittance companies adopting crypto and why customers prefer it.

Time

Traditional remittance processes have become very efficient on their own, but there are so much more than bank remittance routes that need to improve upon when compared to crypto. Normally, remittance can take a long time to reach the intended recipient and may require them to physically collect the payment in some cases.

Crypto remittance, however, only needs the confirmation of blockchain to initiate the transfer, which can take no longer than 60 minutes, at most! As crypto technology and merchant accounts continue to get upgraded, this time delay is sure to reduce.

Access to A Younger Demographic

Millennials and Baby Boomers who are favoring cryptocurrency are also joining in after them. The younger demographic group is driving the market, and as they start working and become responsible for their families, they need a quick and reliable way to send remittances abroad.

By implementing a crypto remittance merchant account in your business, you get to cater to these individuals and set an example for future generations. This way, you get to position your company for the future and become a trustworthy name in the industry for the young.

Other Benefits

There are numerous benefits to using crypto payments for remittance purposes, such as;

• Better capital and liquidity for remittance companies
• Accurate revenue tracking and transfer
• Better transparency and, therefore, trustworthiness
• Smooth exchanges leading to an increased customer base
• No need to exchange currency, which further reduces costs
• Better digital adaptation
• Contingency plan for economic down-times, and more.

Traditional Remittance vs. Crypto Remittance

	Crypto Remittance	Traditional Remittance
How It Works	Money is received by the remittance company and converted into cryptocurrency – which incurs no fee. This payment is then converted back to local currency at the destination country (again, no fee) and given to the recipient. Crypto payments may also be given directly as crypto, which further speeds up the process.	Remittance companies accept dollars, convert it into the currency local to the recipient country, and then transfer it to the target account.
Fees (of Total Cost)	Less than 1%	More than 5%
Time	Less than 60 minutes	More than 24 hours
Intermediaries	No third-party involved	Banks and exchanges get involved
Security	Blockchain-secured transaction	Very little transactional security

Conclusion

The world is constantly looking for faster and more efficient ways to do everything, whether to mow your lawn or send remittances. In such a world, evolution is inevitable, and those who don’t keep up run the risk of drowning. Companies must understand changing trends and mold their processes accordingly.

Crypto is more than just a trend, though, and when it comes to the world of remittances, it is gaining momentum – fast. Companies must use cryptocurrency for remittance, allowing customers more flexibility soon and invite more clients; before the concept becomes common practice.

If you would like to learn more about how crypto merchant accounts can help you make the most out of your remittance business, its benefits, and considerations you need to make, contact us today.

The concept of cryptocurrency has been around since 2009, but it is only in 2017 that it truly began to scale, i.e., when bitcoin jumped from $921 to over $13,062 within 12 months. However, the interest wasn’t as widespread as it became in 2020, which is when the currencies found their way into almost every business.

From all the industries that benefited from crypto payments, high-risk payment industries were the ones that benefited the most. High-risk crypto merchant accounts helped the firearms industry, healthcare, entertainment companies, CBD vendors, gaming and gambling, and other companies that deal with critical information and equipment safeguard their information and transactions.

In this article, we will look at how high-risk cryptocurrency merchant accounts can help reduce the risk for businesses and make their processes more streamlined.

High-Risk Industries Embracing Crypto Payments

When it comes to debit and credit card transactions, large merchant account providers and payment processors often decline their service to high-risk businesses or charge premiums. This limits their options and makes it extremely hard for them to scale.

In the US alone, high-risk markets stack up to roughly $500 billion in transactions annually. As the number of payment processors decreases, they get more power and get to ‘dictate’ terms. The inherent security that comes with cryptocurrency helps balance the status quo again, giving high-risk companies the financial freedom they need to scale their business.

Because of the security and versatility offered by crypto merchants to these companies, high-risk industries embrace crypto payments fairly quickly and facilitate their payments in the process.

Benefits of Cryptocurrency for High-Risk Merchants

Reduced Risk of Fraud

There are a range of benefits that cryptocurrency offers high-risk merchants, with one of the most important and prevalent ones being that of blockchain-backed transactional security. The infrastructure allows for better control over finances and safeguards you as well as your customers.

High-risk companies are particularly vulnerable to chargebacks, fraudulent holds, high transaction fees, or placed on the dreaded Terminated Merchant File (TMF) lists. Cryptocurrency eliminates all these risks by limiting the number of parties included in a single transaction (it’s just you and the other party connected directly to each other!).

Flexible Payment Options

Implement crypto payment merchant accounts allows companies to get access to a younger, more tech-savvy audience, but that doesn’t mean that you have to leave out your current clientele or pay extra to stay relevant to them.

When you use high-risk merchants accounts, you can process crypto payments just as you usually process cards and bank accounts from the same gateway. Every crypto payment merchant account can process credit, and debit cards, but not every card processor can accept crypto payments on the same gateway.

Seamless Transactions

Several high-risk companies have already implemented crypto payments to reduce liquidity risks and fund limitations to boost their business before their competitors do the same. Apart from increased security offered by blockchain technology, companies are also leveraging the seamless, borderless, and low-fee transaction capabilities to scale businesses.

High-risk businesses always risk facing interruptions in their payment processes, be it from the bank, governments, or the customers themselves. The more parties that need to be involved, the more complex a transaction becomes and hence, decreases the purchasing power of individuals.

When high-risk businesses use fiat for their transactions, different banks may also need to be involved, especially if it is an international bank. This increases the cost of transactions and disrupts the high-risk merchant processing. Governments may also get involved, leading to potential delays in payment acceptance.

This means that companies are may be forced to carry out transactions in cash, which isn’t very convenient and may lead to theft.   

Other benefits

There are a range of other benefits that crypto payments offer high-risk merchants, such as;

• The transaction is much more transparent with crypto compared to credit and debit cards. Since there are no intermediaries involved, the transaction fee is fixed, which means that your merchants will know exactly how much they will be charged – down to the last cent!
• Secure communication. The blockchain infrastructure also offers you and your customers the ability to connect on a single block without any prying ears listening/reading in. This opens up room for negotiation and other private matters your clients may want to discuss with you without risking fraud.
• Better integration with customer IDs.
• Decentralized currency means that there are no geolocation restrictions for any transaction, allowing you to target a much broader audience range.
• High-risk businesses are charged extra for ‘premium’ services as it is. This means lower profit margins for such businesses when using standard payment processing platforms.
• The payments are easy to track when reconciling bank accounts at the end of the month. This is blockchain’s ability to offer “computational trust.”
• Since more and more people are going with cryptocurrency, you can safeguard yourself against the potential risks the future may hold due to the economy’s state by implementing crypto payment accounts. This is because the same gateway can process different payment types, including cards and crypto payments. The more payment methods you offer, the more sales you make.

Conclusions

Blockchain technology can help businesses in the high-risk merchant processing industry and customers secure transactions and communications. The potential with crypto merchant accounts is practically limitless, considering how more and more people prefer crypto transactions.

By giving your company space and the ability to connect with this ever-growing market now, you get to gain early access to a large number of clients and avoid any potential economic disasters coming our way in the near or far future!

If you would like to learn more about how crypto payments help high-risk merchants get in touch with us via call or email today!