CLOVR conducted a survey to examine how people currently send money abroad and if there are any other modern ways that are better than the known traditional ones. To perform the study, CLOVR’s researchers surveyed 707 people. Findings show where people send the money to, what the funds are usually used for as well as what the fees are for each method used. Read our full article in order to learn all about it and judge for yourselves if there is a faster and a better way of sending funds abroad.
Where do the remittances go to?
According to the findings of the study, the country that received the most remittances from the U.S. in 2017 was Mexico. The total amount sent comes up to $30.02 billion. This is a huge amount on its own. Combined with the remaining top 5 countries, which are all in the Asia-Pacific region of the world, China, India, Philippines and Vietnam the total sum exceeds the $75 billion.
European countries on the list, Italy, France and Germany, do not receive a great amount of remittances from the U.S. since as shown in the figure below, the total amount received in 2017 was only a little over $6 billion which might sound like a lot but compared to other countries it is not. Even Nigeria and Guatemala received more than all the European countries combined.
Based on the world bank data, over $148 billion was sent abroad from the U.S. in 2017 alone. Most of the funds sent abroad were for food, general household items, housing, medical supplies, clothes and education purposes. At the bottom of the list comes loan repayment, household appliances, travel expenses and even savings. This proves that people send money to their friends, 76.8%, and family, 28.9%, to make sure they are financially taken care of so that they can have a healthy and secure life and not for pleasure purposes.
Is there a cheaper and faster way of sending funds abroad?
Taken into consideration the amount of transactions which are done daily in relation to sending funds abroad, it would be wise to search for a cheaper and faster way in order to save time and money. Traditional transfers via a bank can have more than 10% fees which is pretty expensive compared to digital ways which are cheaper and thus, people prefer those instead.
In addition, PayPal and Western Union are the top two methods that people prefer and as stated by 93.3% of the participants they are pretty satisfied with these online services whereas only 73.3% of the participants are satisfied with the traditional wire transfers. This shows that people want to shift towards the digital way of doing things since these ways can save them both time and money.
Can Cryptocurrencies help with sending remittances?
According to the CLOVR results, a large percentage, 18.9%, of men use cryptocurrency to send money abroad whereas only 11.7% women do. Nevertheless, 85.7% of all participants stated that they prefer cryptocurrency over more traditional methods of sending money abroad. This proves what was already mentioned above, that people prefer the modern ways of doing things by using blockchain, the technology behind cryptos.
However, it should be noted that a lot of people are still not extremely familiar with cryptocurrency and its technology since as reported on the study, 41.2% of the non-user participants stated that they don’t know enough about the technology. Moreover, a large group of the non-user participants also said that they worry that the recipient won’t be able to use cryptos or that the crypto service will get hacked.
In addition, people worry about the security of transactions sent through blockchain as reported by 21.5% of the non-user participants. This shows that people feel more confident about using cryptocurrencies in their everyday life as they learn more about cryptos and their technology. Thus, it should be made a priority to educate people on blockchain so that more people can feel ready to move into the new era of cryptocurrencies.