Migrant workers in the UK, many in low-paid jobs, are sending £8 billion a year to support families in their home countries, says a report from the United Nations’ education agency.
But Unesco warns too much of this “hard-earned money” is being taken in transfer charges by finance companies.
It says that people wiring money should only have to pay 3% in charges – but the global average is 7%.
7% on charges?? How much is that of a billion? This is just the UK. Add in other industrialized nations and that’s a huge chunk in charges.
The UK is in the top 10 countries for overseas workers sending back the money – with billions of pounds sent to the three biggest recipients – Nigeria, India, and Pakistan.
Hundreds of millions are sent to Poland, China, Kenya, Philippines, Bangladesh and Ghana each year.
From the US, remittances have been particularly important to countries in Central America and South America.
But Unesco, in its annual report on education, says too much is being taken in fees by finance firms.
“Companies should not be allowed to continue skimming off so much of the money that migrants are sending back home,” says Manos Antoninis, director of the Global Education Monitoring report.
“Such transaction costs are highest for the poorest migrants.”
XRP as an alternative to save transfer cost
If these people can buy XRP with GBP, send that XRP to their home country, and cash it out on the local rails there it won’t cost them more than .05%-.3% exchange fee both ways. If there is an on ledger pair for their home country, they can just use the XRP ledger to trade GBP/needed currency for a ten-thousandths of a penny. They would then be charged .2% to withdraw to a bank account(depending on the gateway), or .90$ for EU. Companies can even build businesses doing this right on the XRP ledger( without any ripple products), like flash fx ( they offer GBP)
A reader on the Reddit platform said the following:
I live in New Zealand, we’re quite poorly served by crypto exchanges, there are really only a couple that exist.
Anyway, due to the lack of liquidity and the only standard alternatives for FX (like banks etc) all charging around 2-2.5% in FX fees, XRP always trades at a 2-3% premium to the US $ price here.
The extra margin on bitcoin is usually around 1-1.5%.
This is basically because doing the crypto dance is an alternative to standard FX charges, but because there is so little liquidity around, the sellers of crypto can get away with charging extra for the privilege of buying crypto.
So depending on the destination currency / country, there could easily be another couple of percent fee that you haven’t taken into account.
Ripple as a future currency to replace SWIFT
Ripple’s XRP goal is to overtake global commerce by disrupting the currently used and high-fee SWIFT system. Those who transfer money internationally know the slow speed and high fees SWIFT imposes. SWIFT is run off of 40-year old technology, while Ripple’s XRP is 6-years old and faster with much lower fees. If XRP overtakes SWIFT, it will be well on it’s way to the #1 cryptocurrency by adoption and usage in a trillion dollar industry.
Ripple’s XRP will deliver to investors. Its current price does not reflect its future potential. However, it will begin accumulating XRP when it is at $0.4 and below due to the extended cryptocurrency bear market.