Bitcoin Forum
December 04, 2016, 06:15:39 AM *
News: Latest stable version of Bitcoin Core: 0.13.1  [Torrent].
 
   Home   Help Search Donate Login Register  
Pages: [1] 2 3 »  All
  Print  
Author Topic: Wire transfers?  (Read 3239 times)
Elwar
Legendary
*
Offline Offline

Activity: 1932


www.bitpools.com


View Profile WWW
November 28, 2011, 02:06:00 PM
 #1

I was driving down the road and I saw a "Western Union" sign and thought...why do we still have those places around?

Bitcoin could easily replace Western Union all over the world. You just become a Bitcoin exchanger in your store and if someone wants money transferred they just go to an exchanger and send their money to the recipient's Bitcoin address. You go to one of any exchangers and exchange your BTC for your currency and you are all set. The exchangers could charge a fee that is cheaper than sending a wire transfer. Then bam...good-bye Western Union.

Am I missing something here?

http://www.bitpools.com
Pool your bitcoins with others. Vote on solutions using the Bitcoin blockchain. Keep your bitcoins in your cold storage until you find a solution you like.
Links and Reviews of useful every day places to spend bitcoins: https://bitcointalk.org/index.php?topic=943143.0
1480832139
Hero Member
*
Offline Offline

Posts: 1480832139

View Profile Personal Message (Offline)

Ignore
1480832139
Reply with quote  #2

1480832139
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1480832139
Hero Member
*
Offline Offline

Posts: 1480832139

View Profile Personal Message (Offline)

Ignore
1480832139
Reply with quote  #2

1480832139
Report to moderator
DeathAndTaxes
Donator
Legendary
*
Offline Offline

Activity: 1218


Gerald Davis


View Profile
November 28, 2011, 02:13:20 PM
 #2

You aren't missing anything.  It just comes down to infrastructure.

The more places you can send money the more useful the network is.  A network of merchants willing to do BTC:FIAT conversions in meatspace is very powerful.  Maybe even the killer app for Bitcoin.

However a network of 10,000 locations is far more useful than a location of 200 or 12.
ovidiusoft
Sr. Member
****
Offline Offline

Activity: 252


View Profile
November 28, 2011, 02:14:28 PM
 #3

I started this discussion a while ago and we reached a point where it became apparent that it's very difficult to do it legally: https://bitcointalk.org/index.php?topic=48704.0

If you have any expertise in this area, please jump in!
dancupid
Hero Member
*****
Offline Offline

Activity: 954



View Profile
November 28, 2011, 02:15:53 PM
 #4

I was driving down the road and I saw a "Western Union" sign and thought...why do we still have those places around?

Bitcoin could easily replace Western Union all over the world. You just become a Bitcoin exchanger in your store and if someone wants money transferred they just go to an exchanger and send their money to the recipient's Bitcoin address. You go to one of any exchangers and exchange your BTC for your currency and you are all set. The exchangers could charge a fee that is cheaper than sending a wire transfer. Then bam...good-bye Western Union.

Am I missing something here?

Yep - that's what many companies are gearing up to. Alternatively you can do it yourself - I regularly transfer money to China and usually make a slight profit using Bitcoin (because there are fewer Bitcoins in China so the demand is slightly higher).
DeathAndTaxes
Donator
Legendary
*
Offline Offline

Activity: 1218


Gerald Davis


View Profile
November 28, 2011, 02:50:11 PM
 #5

I started this discussion a while ago and we reached a point where it became apparent that it's very difficult to do it legally: https://bitcointalk.org/index.php?topic=48704.0

If you have any expertise in this area, please jump in!

You will still need to comply w/ same AML requirements of both countries (sending & receiving country).  So just because Bitcoin itself is anonymous doesn't mean that cash transfers can be anonymous.  Still there is no reason why you can't require ID at both ends and essentially work like a non-monopoly Western Union network of peers.

Granted because of the legality bootstrapping a venture like this isn't something 2 college kids w/ $800 are going to be able to pull off but for someone with proper venture capital backing the huge profit margins of WU make it a tempting target to decentralize.
dancupid
Hero Member
*****
Offline Offline

Activity: 954



View Profile
November 28, 2011, 03:17:32 PM
 #6

I started this discussion a while ago and we reached a point where it became apparent that it's very difficult to do it legally: https://bitcointalk.org/index.php?topic=48704.0

If you have any expertise in this area, please jump in!

You will still need to comply w/ same AML requirements of both countries (sending & receiving country).  So just because Bitcoin itself is anonymous doesn't mean that cash transfers can be anonymous.  Still there is no reason why you can't require ID at both ends and essentially work like a non-monopoly Western Union network of peers.

Granted because of the legality bootstrapping a venture like this isn't something 2 college kids w/ $800 are going to be able to pull off but for someone with proper venture capital backing the huge profit margins of WU make it a tempting target to decentralize.

I think it can be done fairly cheaply (Western Union have to open operations in many countries - with bitcoin you just need to integrate with the API's of all the exchanges and let the exchanges do the work locally - the local exchange can deal with local legal issues). I think the advantage of bitcoin is that you don't need a vast amount of backing to make this kind of operation work.
I think BitInstant look to be the company to watch in this regard.
DeathAndTaxes
Donator
Legendary
*
Offline Offline

Activity: 1218


Gerald Davis


View Profile
November 28, 2011, 03:23:32 PM
 #7

I started this discussion a while ago and we reached a point where it became apparent that it's very difficult to do it legally: https://bitcointalk.org/index.php?topic=48704.0

If you have any expertise in this area, please jump in!

You will still need to comply w/ same AML requirements of both countries (sending & receiving country).  So just because Bitcoin itself is anonymous doesn't mean that cash transfers can be anonymous.  Still there is no reason why you can't require ID at both ends and essentially work like a non-monopoly Western Union network of peers.

Granted because of the legality bootstrapping a venture like this isn't something 2 college kids w/ $800 are going to be able to pull off but for someone with proper venture capital backing the huge profit margins of WU make it a tempting target to decentralize.

I think it can be done fairly cheaply (Western Union have to open operations in many countries - with bitcoin you just need to integrate with the API's of all the exchanges and let the exchanges do the work locally - the local exchange can deal with local legal issues). I think the advantage of bitcoin is that you don't need a vast amount of backing to make this kind of operation work.
I think BitInstant look to be the company to watch in this regard.

Legal, compliance, and reporting are the big issues.  If you are running the network you need to ensure each storefront in each country is in compliance w/ the host nation's legal requirements related to currency flows.  Not impossible but it is going to require a legal team.  You will also want some mechanism to accurately record Identification and have it available for law enforcement.  Not being able to do that will get you closed and likely charged with money laundering.

Convincing merchants to join the network will be easier if they see some serious commitment to legal compliance, and reporting.  Any merchant participating in the network is potentially liable for AML fines.  In the US you can not only pay a stuatory fine but if found to be willfully noncompliant can face in-reim forfeiture (govt becomes the owner of your assets).  Most businesses of any sizable value would want some sort of insurance to protect them in the event of accidental violation of the law.  Any insurance company would be glad to write such a policy but not without reasonable due diligence into your legal framework.

So the technical aspects are almost trivial compared to the compliance/regulator/legal issues.  Certainly do-able but would require "real" funding, business plan, incorporation, insurance, etc.
Stephen Gornick
Legendary
*
Offline Offline

Activity: 1988



View Profile
November 28, 2011, 05:21:40 PM
 #8

Related: http://en.wikipedia.org/wiki/Informal_value_transfer_system

ovidiusoft
Sr. Member
****
Offline Offline

Activity: 252


View Profile
November 28, 2011, 05:25:42 PM
 #9

Legal, compliance, and reporting are the big issues.  If you are running the network you need to ensure each storefront in each country is in compliance w/ the host nation's legal requirements related to currency flows.  Not impossible but it is going to require a legal team.  You will also want some mechanism to accurately record Identification and have it available for law enforcement.  Not being able to do that will get you closed and likely charged with money laundering.
So the technical aspects are almost trivial compared to the compliance/regulator/legal issues.  Certainly do-able but would require "real" funding, business plan, incorporation, insurance, etc.

Unfortunatly you are so right. I did some more research after I started the other thread and starting this business will most likely require 7 figures funding. It's a little too much considering the current Bitcoin ambiguous legal status. I can only hope that in a few years the situation will change.
Jered Kenna (TradeHill)
Sr. Member
****
Offline Offline

Activity: 420



View Profile WWW
November 29, 2011, 01:18:21 AM
 #10

Legal, compliance, and reporting are the big issues.  If you are running the network you need to ensure each storefront in each country is in compliance w/ the host nation's legal requirements related to currency flows.  Not impossible but it is going to require a legal team.  You will also want some mechanism to accurately record Identification and have it available for law enforcement.  Not being able to do that will get you closed and likely charged with money laundering.
So the technical aspects are almost trivial compared to the compliance/regulator/legal issues.  Certainly do-able but would require "real" funding, business plan, incorporation, insurance, etc.

Unfortunatly you are so right. I did some more research after I started the other thread and starting this business will most likely require 7 figures funding. It's a little too much considering the current Bitcoin ambiguous legal status. I can only hope that in a few years the situation will change.


7 figures and a few months (or longer in some states) can get the US taken care of.
Then you need to research the other countries and get that done if it can even be done.
Far more likely that someone like WU adopts BTC.

By all means try to get it done, it would be great for BTC.
Illegally it's pretty simple assuming BTC grows and you have the people to convert.
Doing it legally is a hell of a lot of work and very expensive. You're trying to undercut one of the most competitive / highly regulated industries in the world. I believe BTC would allow you to do that but they're going to do everything they can to stop you.
We're concerned about complying with the law. Companies you're taking on like Visa literally (not even joking at all) write these laws (to protect consumers..).

I'm all for it, I will cheer you on. I think the whole world can benefit from Bitcoin and my only regret with TradeHill is that I'm so focused on the exchange I can't participate as an individual in the other aspects. But personally I get a lot of satisfaction out of the part I'm playing and truly enjoy this community for what it is.

Jered Kenna

moneyandtech.com
@moneyandtech @jeredkenna
Stn
Full Member
***
Offline Offline

Activity: 230


View Profile
November 29, 2011, 04:34:11 AM
 #11

Once I though to became an agent for a young and cheaper alternative to WU. Then I found requirements in the country where I am:

- reputable enough history
- over $3 mln capital (for the third world country!)
- having bank license or being shopping mall or large international hotel
- etc.

Don't thing that in other countries it could be very different. In other words it means: "Get off you small Charlies from this game". Nobody will allow you to open office with money transfer business (whatever virtual currency) without proper licensing.
Jered Kenna (TradeHill)
Sr. Member
****
Offline Offline

Activity: 420



View Profile WWW
November 29, 2011, 07:21:18 AM
 #12

Once I though to became an agent for a young and cheaper alternative to WU. Then I found requirements in the country where I am:

- reputable enough history
- over $3 mln capital (for the third world country!)
- having bank license or being shopping mall or large international hotel
- etc.

Don't thing that in other countries it could be very different. In other words it means: "Get off you small Charlies from this game". Nobody will allow you to open office with money transfer business (whatever virtual currency) without proper licensing.

Those are application requirements and don't even guarantee you will be given the license as well.

It's an exclusive club.


moneyandtech.com
@moneyandtech @jeredkenna
iamzill
Full Member
***
Offline Offline

Activity: 139


View Profile
November 29, 2011, 08:45:16 AM
 #13

I tried to make a wire transfer 2 days ago, and yet again the banking industry managed to surprise me with their new height of ineptitude.

I gave them clear printed instructions for the wire transfer, but they couldn't do it because "the SWIFT code is invalid". There's a bug in their outdated software that failed to parse a perfectly valid SWIFT code, and yet they kept insisting my information was wrong. So I had no choice but to withdraw everything in cash and deposit them into a second bank.

Bank #2's software managed to recognize the SWIFT code (Well done! Shocked), but before the bank clerk could send out the wire, they had to "confirm with the manager". The "confirmation" wasted me 10 minutes and in the end I was told that the cash deposit would have to be held for 2 business days before the funds can be sent out. Bank #2 couldn't clear bank #1's certified cheque on the same day (there's that ineptitude again) so I had no choice but to do the transfer in cash, and now my money is being held hostage.

Between a bank that can't recognize a valid SWIFT code and a bank that takes 2 business days to check for counterfeits in a cash deposit MADE IN PERSON, I can't tell which one's worst. What do you guys think?
boonies4u
Hero Member
*****
Offline Offline

Activity: 826



View Profile
November 29, 2011, 09:07:21 AM
 #14

I tried to make a wire transfer 2 days ago, and yet again the banking industry managed to surprise me with their new height of ineptitude.

I gave them clear printed instructions for the wire transfer, but they couldn't do it because "the SWIFT code is invalid". There's a bug in their outdated software that failed to parse a perfectly valid SWIFT code, and yet they kept insisting my information was wrong. So I had no choice but to withdraw everything in cash and deposit them into a second bank.

Bank #2's software managed to recognize the SWIFT code (Well done! Shocked), but before the bank clerk sent out the wire, they had to "confirm with the manager". The "confirmation" wasted me 10 minutes and in the end I was told that the cash deposit would have to be held for 2 business days before the funds can be sent out. Bank #2 couldn't clear bank #1's certified cheque on the same day (there's that ineptitude again) so I had no choice but to do the transfer in cash, and now my money is being held hostage.

Between a bank that can't recognize a valid SWIFT code and a bank that takes 2 business days to check for counterfeits in a cash deposit MADE IN PERSON, I can't tell which one's worst. What do you guys think?

Eff the banks, eff wire transfers? I can't really tell you anything that you don't already know, sorry.
Herodes
Hero Member
*****
Offline Offline

Activity: 868


View Profile
November 29, 2011, 02:20:58 PM
 #15


[snip]

Between a bank that can't recognize a valid SWIFT code and a bank that takes 2 business days to check for counterfeits in a cash deposit MADE IN PERSON, I can't tell which one's worst. What do you guys think?

I can tell you what I think, not that it helps for a second though: I think those banks are crooks.
DeathAndTaxes
Donator
Legendary
*
Offline Offline

Activity: 1218


Gerald Davis


View Profile
November 29, 2011, 02:52:47 PM
 #16

I can tell you what I think, not that it helps for a second though: I think those banks are crooks.

I don't know crooks of utterly incompetent?  Hard to decide.  Smiley
Phinnaeus Gage
Legendary
*
Offline Offline

Activity: 1302


Bitcoin: An Idea Worth Spending


View Profile
November 29, 2011, 04:51:27 PM
 #17

I can tell you what I think, not that it helps for a second though: I think those banks are crooks.

I don't know crooks of utterly incompetent?  Hard to decide.  Smiley

...or they're neither. They're just a business. A business consisting of perpetuating debt (=money, or versa visa).
DeathAndTaxes
Donator
Legendary
*
Offline Offline

Activity: 1218


Gerald Davis


View Profile
November 29, 2011, 04:54:01 PM
 #18

I can tell you what I think, not that it helps for a second though: I think those banks are crooks.

I don't know crooks of utterly incompetent?  Hard to decide.  Smiley

...or they're neither. They're just a business. A business consisting of perpetuating debt (=money, or versa visa).


How does that explain the problems the OP had?
repentance
Hero Member
*****
Offline Offline

Activity: 840


View Profile
November 29, 2011, 10:09:22 PM
 #19

I was driving down the road and I saw a "Western Union" sign and thought...why do we still have those places around?

Bitcoin could easily replace Western Union all over the world. You just become a Bitcoin exchanger in your store and if someone wants money transferred they just go to an exchanger and send their money to the recipient's Bitcoin address. You go to one of any exchangers and exchange your BTC for your currency and you are all set. The exchangers could charge a fee that is cheaper than sending a wire transfer. Then bam...good-bye Western Union.

Am I missing something here?

The person you send a WU transfer to generally gets paid in their local currency - you wire money when you want the receiver to have instant access to funds.  Bitcoin might be able to offer fast transfers, but the person receiving them still has to take additional steps to convert them to local currency - either selling them OTC or selling them on an exchange and then withdrawing the proceeds, both of which take time.

There are a ton of money transmitting services apart from WU around and plenty of them have low fees for payments which are transferred to the bank account of the receiver.  These businesses are already licensed and already have the infrastructure to support smooth processing of payments.

Individual merchants aren't going to make enough from Bitcoin to justify the up-front cost of becoming licensed money exchangers/transmitters/deposit takers/whatever.  Merchants in a given location could set up a company and have that company obtain a financial serviced licence under which they could all operate as money transmitters but you'd still need a lot of daily transactions to offset the cost. 

People aren't going to use Bitcoin to receive funds if they can't conveniently liquidate them or spend them.  Merchants operating as Bitcoin>fiat exchangers would need to locate where there's a demand for that service.  If Bitcoin exchangers aren't easy to get to then people will just choose an alternate method of receiving funds.

To become competitive in the instant payment processing market, the whole fiat>Bitcoins>receiver>local currency cycle needs to happen in a much faster time frame.  If people can't spend the funds they've received instantly, then Bitcoin offers no real advantages over existing low cost payment processors - it's more effort to use Bitcoin and people need a significant incentive to use a platform which requires more effort.




All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
DeathAndTaxes
Donator
Legendary
*
Offline Offline

Activity: 1218


Gerald Davis


View Profile
November 29, 2011, 10:21:31 PM
 #20

I was driving down the road and I saw a "Western Union" sign and thought...why do we still have those places around?

Bitcoin could easily replace Western Union all over the world. You just become a Bitcoin exchanger in your store and if someone wants money transferred they just go to an exchanger and send their money to the recipient's Bitcoin address. You go to one of any exchangers and exchange your BTC for your currency and you are all set. The exchangers could charge a fee that is cheaper than sending a wire transfer. Then bam...good-bye Western Union.

Am I missing something here?

The person you send a WU transfer to generally gets paid in their local currency - you wire money when you want the receiver to have instant access to funds.  Bitcoin might be able to offer fast transfers, but the person receiving them still has to take additional steps to convert them to local currency - either selling them OTC or selling them on an exchange and then withdrawing the proceeds, both of which take time.

There are a ton of money transmitting services apart from WU around and plenty of them have low fees for payments which are transferred to the bank account of the receiver.  These businesses are already licensed and already have the infrastructure to support smooth processing of payments.

Individual merchants aren't going to make enough from Bitcoin to justify the up-front cost of becoming licensed money exchangers/transmitters/deposit takers/whatever.  Merchants in a given location could set up a company and have that company obtain a financial serviced licence under which they could all operate as money transmitters but you'd still need a lot of daily transactions to offset the cost. 

People aren't going to use Bitcoin to receive funds if they can't conveniently liquidate them or spend them.  Merchants operating as Bitcoin>fiat exchangers would need to locate where there's a demand for that service.  If Bitcoin exchangers aren't easy to get to then people will just choose an alternate method of receiving funds.

To become competitive in the instant payment processing market, the whole fiat>Bitcoins>receiver>local currency cycle needs to happen in a much faster time frame.  If people can't spend the funds they've received instantly, then Bitcoin offers no real advantages over existing low cost payment processors - it's more effort to use Bitcoin and people need a significant incentive to use a platform which requires more effort.


I think you might be missing the point.

Local store accepts fiat.  He is part of the network so he has an exchange account w/ fiat already loaded (float).  He uses fiat on exchange to buy Bitcoins (minus half the transaction fee) and sends them to the receiving store/merchant.  He can then use some slow mechanism to refill his exchange account w/ fiat (weekly wire transfers, etc).

Receiving store/merchant account instantly sells Bitcoins once received for local currency on the exchange.   The recipient comes to store shows ID and collects the funds minus the other half of transaction fee.

As long as each store has enough fiat "floating" on their exchange accounts they can process transaction in near realtime (1 hour for 6 confirms).

The technical aspects are not very hard.  The legal/regulatory/reporting aspects is what is tough but not unsolvable.

Quote
People aren't going to use Bitcoin to receive funds if they can't conveniently liquidate them or spend them
Sender would pay in local currency
Receiver would get paid in local currency.
Bitcoins would only be used for internal network transfers.
Bitcoin lowers the cost of business for each local "branch" (independent merchant part of money changer network).

Each branch would only need.
a) an exchange account in their local currency.
b) enough fiat floating on exchange account to cover transactions between periodic refreshing (from money paid by sending user).
c) a secure website/console to verify transactions and record Identification provided.
Pages: [1] 2 3 »  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!