The remittance market is huge. According to a World Bank estimate, remittance flow to low and middle-income countries rose by 9.6% in 2018, reaching an all-time high of $529 billion. The global remittances for the same year jumped to $689 billion from $633 billion in 2017.


This vast network of global payments processing is mostly handled by third parties called Money Transfer Operators (MTOs). They act as the most convenient option for migrant workers to send money back to their families. However, with their current business model, MTOs are highly inefficient and are in dire need of technological disruption.


Before we head to the solutions blockchain can offer to today’s remittance system, let’s briefly discuss the problems with remittances that need attention. 

Problems with current remittance system

  • High transaction fee

According to reports, money transfer companies charge anywhere between 7 to 15% as transaction fees for international transactions. This brings a huge loss for workers sending payments to their families. It is a clear reflection of how strongly biased the present system is toward the financial service providers.

  • Slow transaction settlement

Despite the high fees financial service providers charge for international payments, the process is often very slow. It may take anywhere between four to seven days for the money to reach the receiver’s bank account. International transactions often include multiple banks and operators to process the funds and each involved party charges a fee to process the transaction, thus, adding to the time and cost for the transaction.

  • Other Restrictions

With the conventional method of making international payments, there are multiple restrictions. For one, people can only make transactions during the working hours of their bank providers. Second, there are also defined restrictions about the amount they can send in one transaction. And finally, there is no way to track the payment unless it reaches the receiver’s account.

Blockchain solutions for remittance

  • Cheaper cross-border payments

Blockchain is a decentralised, borderless technology that allows everyone to make payments to any country in the world. National and international transactions are all the same on a blockchain ledger. And unlike traditional remittance system, blockchain payments only cost between 0.1% to 1% transaction fees.

  • Almost instant transaction

Being a peer-to-peer payment network, blockchains eliminate the need for any middlemen in the transaction. Transactions are directly sent from the sender to the receiver’s wallet. This reduces the settlement time from multiple days to just a few minutes or even seconds, in some cases. 

  • No need for bank account

Almost 1.7 billion adults throughout the world do not own a bank account. Use of a blockchain-based payment system can help deliver financial services to these adults and allow them to directly receive funds from their earning members. All they need is a mobile phone and a digital currency wallet.

  • No bank-like restrictions

Blockchains are active at all times. There are no restrictions as to when one can transfer the funds. People can also choose any amount and instantly make an international payment. They can also check the live status of their payment on a block explorer to confirm whether the payment is processed or not.


The problems with the legacy remittance system have a drastic impact on migrant workers and their families, especially in the case when their payments are not on the higher end. Thus, the implementation of blockchain technology is a much-needed reform we need in cross-border transactions.