Disruption: Is Western Union the Next Blockbuster?

Bitcoin could cause trouble for Western Union

New cryptocurrencies like Bitcoin are disruptive by their very nature. They allow for cheaper, faster, and easier payments than any system can currently do. Market leaders in remittances, banking, and investing, could have their world turned upside down by the new Bitcoin ecosystem!

Since Bitcoin allows for many banking or payment transfer “functions” to be automated by user created applications (similar to apps. in the iTunes app. store), some believe that these currencies could disrupt industry leaders like Western Union and Paypal in a same way that Napster altered the music industry.

...here’s what might happen.

How Could Bitcoin Disrupt Businesses?

The “obvious” players that Bitcoin could disrupt are payment transmitters like Paypal and Western Union, as well as major banks.

The remittance industry is a $500 billion dollar per year business, which is well known for its astronomically high fees. The largest remittance markets are India, China, and Mexico with 63, 40, and 23 billion dollars being sent respectively for the year of 2011.

Western Union is a key player in the remittance industry. Their transaction fees to send money from one country to another can reach as high as 10%, while their customers are some of the poorest in the world!

Bitcoin could disrupt the remittance industry by allowing for a much lower transfer fee of around 1%. A newly invented service or cellphone “app” could easily take advantage of this reduced rate to send money and “shake up” the established order.

For example, a recent Reddit post documented the “insanely high” fees charged by Western Union to transfer money out of the country. One user showed a cost of $111 for an immediate transfer of $1200! The same transfer in a period of 1-3 days would cost slightly less at $76.

Bitcoin could drive an almost 10% decrease in cost to transfer money compared to traditional means like Western Union!

The difference in price between these 2 services would be around $110 in cost. So, If a new Bitcoin start-up could save consumers $110 for the same service, why would anyone NOT use it?

Bitcoin also allows the transfer of large amounts of money, from $10 to $10 million dollars for the same fee. If you were to send $10 or $10 million dollars via Bitcoin, the cost would not change.

The traditional cost to send high dollar amounts via traditional banking can be astronomical. If Bitcoin were used to send these 2 amounts, it would cost pennies, as opposed to $1000.00’s.


Disruption is a word has come to describe the new wave of internet businesses that “upend” the established market leaders. Companies like Uber, Tesla, and AirBnb are currently disrupting the taxi, car, and hotel industry...

New upstarts can create a superior product and scale it globally via the internet or the iTunes app store. The internet allows a brand new group to compete with market leaders on an international level.
Bitcoin is a technology that is poised to launch the next wave of disruptive businesses like Uber and Tesla.

Bitcoin startups will use payment systems that benefit their consumers and are cheaper, faster, and better. They can use QR codes, allow mobile payments, and create cellphone applications that are a bankers worst nightmare!

While governments have failed to advance their money and currencies, the private sector has taken it into its own hands.

Bitcoin is a system that can potentially work better than traditional currencies. No one knows if these new currencies will be adopted by the public, but naysayers should not ignore the world-changing technology as a source of Bitcoin’s value.

Jonas Borchgrevink @JonasBorch

Founder of CCN.com and Hacked.com. Passionate about how technology can empower people to create a more just and sustainable world.

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