Bithumb, South Korea’s largest cryptocurrency exchange, has partnered with major cryptocurrency payment processor BitPay to facilitate international remittance payments.
Sonny Singh of Bitpay, the chief commercial officer at BitPay, stated that the company is on track to process $4 billion worth of transactions in 2018, and the team is focused on allowing cryptocurrencies like bitcoin to be more accessible for casual users by assisting large-scale retailers to integrate cryptocurrencies as a payment method.
During an interview with CNBC, Singh announced that the company has partnered with Bithumb to target the $200 billion remittance industry by targeting payments between South Korea and the west.
“Cross-border payments in South Korea and the west [have become] a $200 billion industry this year. Bithumb is obviously one of the largest exchanges in the world,” said Singh.
For many years, since 2014, several remittance-focused companies have attempted to utilize cryptocurrencies to process large sums of remittance payments, given the expensive fees and costs paid by both remittance senders and receivers when using existing remittance service providers like Western Union and Moneygram.
One disadvantage with traditional remittance companies is that in provinces or rural areas wherein remittance centers are non-existent, receivers often are required to travel far distances to receive their money, which becomes time-consuming and costly.
Singh stated that the partnership between Bithumb and BitPay would allow users to process cross-border payments with a 1 percent fee and a guaranteed settlement time of 1 day.
“We’re trying to make it so that people can get money cheaper and quicker from suppliers internationally. So right now, someone in South Korea can pay a million-dollar invoice in the United States using Bithumb to buy bitcoin and pay the invoice, and BitPay will process that invoice and settle in US dollars the next business day,” Singh explained.
Bithumb has also started to deploy cryptocurrency ATMs in South Korea, to allow any individual within the country to easily purchase and sell cryptocurrencies, also easing the process of sending remittance payments with cryptocurrencies.
While BitPay and Bithumb are focused on targeting the South Korea-to-US remittance market, other companies like South Korea’s largest internet conglomerate Kakao are focused on serving the Asian remittance market, which is valued at $500 billion.
Last year, Kakao, which has control over the country’s messaging, fintech, taxi, and social media industries with a 90 percent market share in each industry, acquired a 40 percent stake in Satoshi Citadel Industries, the largest bitcoin-focused investment firm and remittance company in the Philippines.
Rebit.ph, a cryptocurrency-based remittance app that is operated by Satoshi Citadel, has been processing remittance payments between the Philippines and many countries in Asia.
In most developed countries like South Korea and the US, expat workers do not rely on remittance service providers but rather work with banks to send and receive payments. However, in countries like the Philippines and Malaysia with relatively low wage for local workers and limited access to banking services, employees utilize remittance platforms to settle payments.
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