Crypto Zooms Past Paper to Draw More Users As Checks and Money Orders Lose Steam
A new study reveals that cryptocurrency has surpassed
mailed checks and money orders as a way of sending money overseas. According to Clovr, 15% of respondents say they’ve used cryptocurrency to send money, while 11.8% say they’ve mailed checks and money orders.
More than half of the 707 people surveyed identify PayPal and Western Union, among other online services and traditional money transfer companies, as the most common way to send funds for food, household items and housing for friends and family living abroad.Traditional wire transfers, prepaid cards, cash and post office wire transfers round out the top methods for sending remittances.
Top Methods for Sending Remittances Abroad
- Online services (i.e. PayPal) – 51.0%
- Money transfer services (i.e. Western Union) – 50.9%
- Traditional wire transfer (via bank or credit union) – 25.7%
- Cryptocurrency – 15.8%
- Prepaid card – 12.2%
- Check or money order (via mail) – 11.8%
- Check or money order (online) – 11.5%
- Cash (via mail) – 8.9%
- Traditional wire transfer (via post office) – 6.1%
- Other – 1.9%
The study, conducted using Amazon’s Mechanical Turks to crowdsource data, also reveals high fees for sending money through traditional means. In order to send $500 abroad, banks charge an average of $52.05. Money transfer operators charge $30.75. The post office charges $34.05, and mobile operators charge $16.
The average person sends $3,315 per year and pays $585.99 in fees. Over 15% of people who used traditional wire transfers, paying the highest fees, reported being dissatisfied, while 10.4% of those who used money transfer services, with lower fees, reported dissatisfaction. The number one reservation respondents have about using cryptocurrency is that they don’t know enough about the technology. The second most common reservation is worrying the recipient won’t be able to use the crypto to buy goods.
Mexico, China, India, the Philippines and Vietnam were the top five countries to receive remittances from the US in 2017, for an estimated $150 billion sent, according to the World Bank. According to Dilip Ratha, head of KNOMAD, a World Bank initiative for Global Knowledge Partnership on Migration and Development,
“While remittances are growing, countries, institutions, and development agencies must continue to chip away at high costs of remitting so that families receive more of the money. Eliminating exclusivity contracts to improve market competition and introducing more efficient technology are high-priority issues.” The World Bank estimates that almost $150 billion in remittances was sent abroad from the US in 2017.
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