How Steem could Disrupt the $800 Billion Remittances Industry

Over the years there has been much talk about the potential for using cryptocurrency for remittances. There has been some success in that area, but also setbacks as the rise in transaction fees have eroded much of the benefits of running remittances via cryptocurrency. This is why for example BitSpark began migrating from Bitcoin to BitShares and BitPesa have focussed more on B2B than end consumers. As a whole the crypto remittances industry is still very small.

Steem has some major advantages over other cryptos if it were to be used for remittances.

1. Steem transactions are free. In theory the entire remittance process can be free as a result of this, although there are hurdles to overcome before they will be entirely free. Compare this to the 20% fees typical in some African corridors ($40 to send $200).

2. Steem is building active userbases in some of the most importance remittance markets. For example Nigeria and The Phillipines are major remittance markets, both of which have a large presence of users on Steemit.com.

3. Steem transfers are instant, so remittances can potentially happen very quickly.

Steps to create a remittance market on Steem.

Note: This is a rough draft of an idea. The intent is to start a discussion, there is likely much to be worked through in this concept.

1. Identify Remittance Corridors

Remittance corridors are pairs of countries where there has been a lot of migration in recent years. Younger migrants sending money to their family at home, and sometimes vice versa. There is a large movement of money via such corridors, and very little between others. For Steem, the best such corridors will be places with high Steem populations and high fees for traditional remittances.

2. Establish Fiat trading pairs on both sides of the corridor.

It is very important to have a fiat-Steem trading pair on both sides of the corridor. If people are forced to trade to Bitcoin first, it only adds complexity and cost. The advantage of using Steem should be that it is low friction, there shouldn't be extra costs or it won't be competitive.

3. Establish Remittance Agents on recipient side.

Even with a growing userbase, it will be a long time before everyone in a certain market (eg. Nigeria) is on Steem. Remittance agents would be responsible for getting fiat to intended target. They would get a cut, but it would need to be small enough to be competitive.

4. Establish a site or system for facilitating these remittances.

Accept bank transfers, etc. and connect to remittance agent to get money to final destination.

5. Subsidize this all with a promotional campaign.

Initial remittance agents could be paid with the benefit of upvotes for promoting the service/system. See examples of such campaigns by Promo-Steem team