The top factor reducing poverty in the developing world today isn’t the 150 billion dollars in annual international aid given by the developed economies but rather the over 400 billion dollars worth of global remittances sent home each year by the world’s 250 million migrant workers.
Every year migrant workers in the First World, send money home through small cross-border payments in order support their families. This income is crucial in the developing world. In the Philippines for example these remittances can make up a quarter of the national economy and they are a huge boost in countries like India where the average annual income is around 600 USD. Scandalously, giant global financial institutions charge sky high fees on small but crucial transactions. The profits they make by doing so are a thinly disguised wealth transfer from the world’s poorest to the world’s richest and equals roughly 30 billion dollars a year, or about the same as the US non-military international aid budget. It’s a big enough of a issue that in 2015 lower remittance fees on transfers of 500 dollars or less was made part of the UN’s Official Sustainable Development Goals.
I would it be much better, more efficient and extend the positive impact of these remittance funds if the lumbering, bloated, financial services giants that currently dominate the industry could be bypassed. This is the vision of Vietnamese entrepreneur Ronald Le.
“Why should some of the most wealthy financial institutions in the world continue to take advantage of the world’s working poor through their predatory, high fees?” asks Le, the CEO of Blockchain startup Hawking Network, “There’s a faster, more convenient and safer option available for a small fraction of the cost.”
He points out that the old line players, many of whom are still tied down to 19th century era business models, have been too greedy for too long and says hundreds of millions of potential customers are sick of being taken advantage of and are ready for something new.
“Now that we have cryptocurrency and companies like Hawking Network, sending cash through Western Union with a high fee will soon be like paying all your money to send a written letter on the Pony Express. It won’t makes sense.”
Amazon.com founder Jeff Bezos once clarified his company’s business strategy by famously saying, “Your margins are my opportunity.” When he said this he showed the way for smarter, faster companies to out-compete their larger, more resource-rich competitors. Today entrepreneurs like Le who combine old fashioned, capitalist ambition and revolutionary zeal are following Bezos example and targeting a crucial 400 billion dollar market that’s ripe for disruption.
“The days of greedy banks getting fatter and fatter with high fees and poor service are over,” Le concludes, “And the days of dependable, frictionless finance powered by Blockchain are here.”