extinguishing Western union

[eerygarden]

I want to understand how it can be as low as 1%

Using UK to Phillipines as an example there are two conversions.
1. GBP to bitcoin
2. Bitcoin to Phillipine Peso

Todays exchange rate is 1 GBP = 70.5682 PHP

So the nurse working in the UK wanting to send £100 home to family in the Philipines would like her son to get as close to 7,056.82 PHP as possible.

I was going to write about the two conversion costs necessary, but it kind of seems unnecessary now that I have seen WU's cost seems to be around 1.5%

1.5% is decent no?

[NyeFe]

1.5% is decent no?

1.5% is good, the point is, it could be pushed to 0.5% or even 0.1% to 0.04% at a profit for some btc businesses.

[eerygarden]

1.5% is decent no?

1.5% is good, the point is, it could be pushed to 0.5% or even 0.1% at a profit for btc businesses.

So talk me through that. Whilst bitcoin is not spendable prevalently in the Phillipines there needs to be a third party for the son to change his bitcoins in to Philippine Pesos. A third party that wants to make some sort of profit and also a third party that is exposed, for a certain amount of time to the volatility of the value of bitcoin.

There's also the predicament of the nurse needing to convert here GBP in to bitcoins initially. Again this presumably requires a third party wanting to make a profit and that is exposed to risk. I know in the UK that you can buy pretty much instantly from a market place but you are looking at 4%+ for your purchase. Purchasing £100 from an exchange would probably be more expensive due to bank fees and exchange rates and would require a wait of 2-5 working days.

I am failing to see how bitcoin can compete with WU. Even if bitcoin was spendable prevalently in the Phillipines, the purchasing cost in the first place is more expensive than WU.

[NyeFe]

1.5% is decent no?

1.5% is good, the point is, it could be pushed to 0.5% or even 0.1% at a profit for btc businesses.

So talk me through that. Whilst bitcoin is not spendable prevalently in the Phillipines there needs to be a third party for the son to change his bitcoins in to Philippine Pesos. A third party that wants to make some sort of profit and also a third party that is exposed, for a certain amount of time to the volatility of the value of bitcoin.

There's also the predicament of the nurse needing to convert here GBP in to bitcoins initially. Again this presumably requires a third party wanting to make a profit and that is exposed to risk. I know in the UK that you can buy pretty much instantly from a market place but you are looking at 4%+ for your purchase. Purchasing £100 from an exchange would probably be more expensive due to bank fees and exchange rates and would require a wait of 2-5 working days.

I am failing to see how bitcoin can compete with WU. Even if bitcoin was spendable prevalently in the Phillipines, the purchasing cost in the first place is more expensive than WU.

Of course the cheapest methods are the most time consuming. Let's look at a free service such as https://localbitcoins.com. This makes it possible to find local bitcoiners who are in need of someone willing to give them those precious pesos for bitcoins via face-to-face trade I.e. leaving bitcoins transaction fee, 0.0001 (£0.02, PHP 1.28, $0.03) or 0.00000000, in the picture. Now you can either hold those coins yourself or directly redirect them to the recipient (who only needs to repeat this process to complete the circle) There's nothing more I can say in regards to bitcoins price volatility; it could either come as an advantage or disadvantage.

[LiteCoinGuy]

I am quite a fan of Andreas Antonopolous. I have seen numerous videos of him on YouTube and his enthusiasm for bitcoin is fantastic. I have heard him say before that bitcoin is a threat to Western union and in the latest video I watched of him (brilliant BTW) he again mentioned Western union.

"We are going to see bitcoin impacting remittances long before we see it impacting retail. We are not going shopping with bitcoin, we are taking out Western union."
https://youtu.be/SEJGFY0iDUw

He mentions that UK to the Philippines is a major remittance route and bitcoin ATMs are facilitating this today and hints at a 1% fee but I believe that bitcoin ATMs have higher margins than this. If this is happening, where is it happening and how can we speed it up?

----------

where do you see 1,5% ? i see a 3,9% fee + they can cheat you with the exchange rate.

[LFC_Bitcoin]

When bitcoin achieves widespread mainstream adoption Western Union is going to be one of the first big companies to suffer. Bitcoin will basically wipe them our & take most of their business. The fees are incomparable, Western Union are robbing people to send money abroad, it's disgusting. There is only one winner long term & it isn't Western Union.

[eerygarden]

where do you see 1,5% ? i see a 3,9% fee + they can cheat you with the exchange rate.

Hmmm I worked out the amount to receiver figure as a % of the exchange rate figure taken from xe.com.

7056.82 - 6951.13 = 105.69 / 7056.82 * 100 = 1.4977%

You are right though, there is a £3.90 charge and a poorer exchange rate.
So I think I understand now that the sender receives a 3.9% fee and the receiver suffers a 1.5% fee on top.

Looking at the localbitcoins options I don't think that it is currently competitive for someone looking to remit money to their homeland from a developed nation. I have never seen a bitcoin ATM, but from what I have seen online, they don't typically have very flattering buy/sell margins either.

So, if this is something that we are going to do..... what's the plan Andreas?

[eerygarden]

He mentions that UK to the Philippines is a major remittance route and bitcoin ATMs are facilitating this today and hints at a 1% fee but I believe that bitcoin ATMs have higher margins than this. If this is happening, where is it happening and how can we speed it up?

The Philippines seems to be a hotbed of BTC activity compared to elsewhere. It's humming along.

https://www.goabra.com/ seems to be pushing the remittance angle. I've no idea how many people they've signed up and it's pretty interesting that there's virtually no mention of Bitcoin anywhere but I'll be keen to see how far they get.

I am looking more in to this. Thanks for sharing.

[gentlemand]

He mentions that UK to the Philippines is a major remittance route and bitcoin ATMs are facilitating this today and hints at a 1% fee but I believe that bitcoin ATMs have higher margins than this. If this is happening, where is it happening and how can we speed it up?

The Philippines seems to be a hotbed of BTC activity compared to elsewhere. It's humming along.

https://www.goabra.com/ seems to be pushing the remittance angle. I've no idea how many people they've signed up and it's pretty interesting that there's virtually no mention of Bitcoin anywhere but I'll be keen to see how far they get.

I am looking more in to this. Thanks for sharing.

I don't know how operational it is. It might just be busy burning VC money but at some point they might deliver. Worth a watch at least.

[NyeFe]

When bitcoin achieves widespread mainstream adoption Western Union is going to be one of the first big companies to suffer. Bitcoin will basically wipe them our & take most of their business. The fees are incomparable, Western Union are robbing people to send money abroad, it's disgusting. There is only one winner long term & it isn't Western Union.

You couldn't be more correct. As the adoption of Bitcoin grows, the need to convert btc to fiat, vice versa, would also increase at a local level, therefore, making it much more possible to locally source individuals willing to trade. This would reduce the need to use bank transfers, online exchanges, WU and the fees they impose.

[gentlemand]

Hmmm I worked out the amount to receiver figure as a % of the exchange rate figure taken from xe.com.

7056.82 - 6951.13 = 105.69 / 7056.82 * 100 = 1.4977%

You are right though, there is a £3.90 charge and a poorer exchange rate.
So I think I understand now that the sender receives a 3.9% fee and the receiver suffers a 1.5% fee on top.

Looking at the localbitcoins options I don't think that it is currently competitive for someone looking to remit money to their homeland from a developed nation. I have never seen a bitcoin ATM, but from what I have seen online, they don't typically have very flattering buy/sell margins either.

So, if this is something that we are going to do..... what's the plan Andreas?

This is an interesting breakdown of remittance costs

http://www.theguardian.com/global-development/ng-interactive/2014/aug/19/-sp-remittances-countries-highest-fees-interactive

I think it varies vastly between source and destination. Those WU costs you posted are probably cheaper and faster than a conventional bank transfer.

Weirdly, Iceland costs 10% to transfer £100 to and the Central African Republic costs 5%.

I used a have a local friend go broke who refused to have a bank account so I'd have to bail them out via WU when they starved. They lived 50 miles down the road and the cost was 5-10%.

[NewLiberty]

I like that the discussion here has shifted from "lets shut down their business" to "how can we do a better business than WU does".

Extinguishing WU isn't something that we will do, it's something that WU will do... by not taking advantage of what Bitcoin offers.  At any moment that can change.

They have money service licenses everywhere they are needed, and points of presence globally.  If they wake up, they could be one heck of a Bitcoin business.

Sure, WU has been gouging the great quantity of poor-but-loyal-to-remote-family hard working people everywhere for generations.  The cash from such gouging can buy up a bunch of existing Bitcoin businesses to ramp up fast and gain some talent.

Full disclosure:  I'm short WU stock (until they seem ready to pivot to Bitcoin).

[Lauda]

People trust western union.  Right now most people don't think bitcoin is safe.

I would argue that this claim is incorrect. The main problem is that people do not understand Bitcoin. If your sole wish is to send someone money then there is nothing problematic about Bitcoin.
Just register at some verified exchange and buy it, then withdraw to the address of your choice. You could even directly withdraw to the person that you wish to send the money.

The problem is that people either do not clearly see the benefits that Bitcoin offers or just do not understand it. Wasn't there a chart recently that showed that the 7d volume had surpassed WU's 7d volume at that point?

[LiteCoinGuy]

where do you see 1,5% ? i see a 3,9% fee + they can cheat you with the exchange rate.

Hmmm I worked out the amount to receiver figure as a % of the exchange rate figure taken from xe.com.

7056.82 - 6951.13 = 105.69 / 7056.82 * 100 = 1.4977%

You are right though, there is a £3.90 charge and a poorer exchange rate.
So I think I understand now that the sender receives a 3.9% fee and the receiver suffers a 1.5% fee on top.

Looking at the localbitcoins options I don't think that it is currently competitive for someone looking to remit money to their homeland from a developed nation. I have never seen a bitcoin ATM, but from what I have seen online, they don't typically have very flattering buy/sell margins either.

So, if this is something that we are going to do..... what's the plan Andreas?

that is the point i guess.

maybe BTC lacks adoption and proper options to remit money worldwide at the moment. BUT this has already changed and will change even more in the future.

in the future you will pay 0,xxx % and not 5-15 %
(+ instant transactions with BTC)


@LaudaM

people dont know about BTC, trust is not the problem.
+ we need more infrastructure.

[unamis76]

1.5% is decent no?

Not decent at all, especially when you think how many users they have, and how many "1,5%"'s they take...

[eerygarden]

1.5% is decent no?

Not decent at all, especially when you think how many users they have, and how many "1,5%"'s they take...

Aye, but there is no one out there using bitcoin to do anything like 1.5% at present.

[galbros]

I would agree that money transmitting, especially internationally, is something that bitcoin is great at.

It would be easy for an association of money transmittal firms to use bitcoin to settle or facilitate transfers.  Who know, maybe WU will do so itself!

I do worry that fees will increase as regulation increases, but right now, sending money internationally via bitcoin is virtually free.

Great chart Litecoinguy!

[jonald_fyookball]

1.5% is decent no?

Not decent at all, especially when you think how many users they have, and how many "1,5%"'s they take...

stop saying its 1.5% as its not.  as someone said its 3.9 plus 1.5 = 5.4%.  plus fx spreads.

my own experience is that it cost me roughly $60-$70 to send $1000 to Argentina.

and I think you have a bad attitude toward business.  who cares if they are making money.  they are a business.  that's what businesses do.  if you don't like the fees, and there is something better, don't use them. that's the point.

[solex]

Everytime I see a Western Union death thread, it fails to point out that WU has been experiencing record growth and profits over the past few years, so Bitcoin hasn't been making any sort of dent in it.

Western Union share price for 5 years, massively underperforming the S&P 500 (red line).
Note that the drop at the end of oct 2013 coincides exactly with the first Bitcoin BTM at Vancouver which was a huge media event and preceded the $1150 run-up. WU claimed their share price was hit by "cost overhead from increased money transmission regulations" though it suffered in Oct 2012 too (more regulations then as well?)

[bornil267645]

Bitcoins are much faster than any other fiat currency. When it comes to speed, the fiat currency system is nowhere near the promptness of Bitcoin. Whenever you need to exchange from one fiat currency to another or to make a transaction, the wait is sometimes unbearable. In the era of speed and precision, you can either get through the banks, their questions (not to mention their fees) and wait an eternity for their approval, or you can just use Bitcoin to transfer millions of dollars, for negligible fees, in a matter of seconds.