Is Bitcoin an option for low- and middle-income countries [Fees & Costs]

[apogio]

I am curious to know if (and how much) Bitcoin is adopted in low- and middle-income countries.

I am reading the Bitcoin Magazine (Issue 24 - The El Salvador Issue).

Here are some stats, according to the magazine:

• The global average cost of sending $200 remained high at 6.5% - or $13, in 2020.
• In Sub-Saharan Africa, the average cost of sending $200 was 8.2% in 2020.
• Sending money from Japan to Brazil cost 11.5% in remittance costs in 2020
• 1 out of 9 people on the planet depend on remittances sent by migrant workers to support their families.

According to these, do you feel like Bitcoin has helped? Do you use it to avoid all those remittance costs?

[1715622813]

1715622813

[1715622813]

1715622813

[BIT-BENDER]

Based on the transaction process Bitcoin Is a better option than using the traditional financial system, also it's easier to send Bitcoin from your wallet to the receiver wallet no matter where dey are and the transaction process is faster than that of the traditional financial system which may take days or even weeks
Yes to the average income earners I think having an easy financial Transaction system is a plus.

[Zaguru12]

According to these, do you feel like Bitcoin has helped? Do you use it to avoid all those remittance costs?

Yes I would say the ease of bitcoin transfer during cross border transactions has actually been the biggest flex of bitcoin against other traditional means of exchange. Aside the charges which as you pointed out is very low when compared fiat, another advantage again is the lack of limitations on using bitcoin, if you use fiat through banks you have daily or monthly limit for the transfer or better still the charges is in batches based on amount to be sent and not uniform like that of bitcoin, and this sometimes frustrating for an average citizen in this middle- incoming countries.

Another thing that drive adoption aside remittances in this countries is the continuous devaluation of their currencies in high rate. This devaluation requires to look for a more stable store of value and bitcoin provides them with

[apogio]

Another thing that drive adoption aside remittances in this countries is the continuous devaluation of their currencies in high rate. This devaluation requires to look for a more stable store of value and bitcoin provides them with

Super important note, thanks for mentioning that.

According to this, Argentina (for example) faced 98% inflation in 2022.

Imagine going to the store and suddenly, in a year, every price has doubled...

also it's easier to send Bitcoin from your wallet to the receiver wallet no matter where dey are and the transaction process is faster than that of the traditional financial system which may take days or even weeks

Easier and faster, yes! This is also true. I wonder though, how much time it takes to send a traditional remittance from a country to another. I have never sent one, so...

[un_rank]

I do not use it for cross border transactions cause those I regularly transact with are not exactly excited about the prospects of bitcoin and refuse to use it, even for the singular purpose of receiving.
On a more general perspective, Bitcoin is cheaper and faster than other cross border channels for money transfer. For everyday expenses the transaction fee can be a burden ads it is now, but for larger transactions to farther distances it is the ideal option to use, showing that bitcoin can be scalable depending on how it is used.

This feature is not limited to low and middle income countries. Anyone who engages in international transactions will appreciate using bitcoin as the channel.

- Jay -

[Davidvictorson]

I am curious to know if (and how much) Bitcoin is adopted in low- and middle-income countries.
According to these, do you feel like Bitcoin has helped? Do you use it to avoid all those remittance costs?

I am from a low and middle income country. 9 out of 10 people I know do not use bitcoin to avoid remittance costs. It would have been a great option but our folks and friends who are outside the country in a developed, do not mind the fees mostly because they are not as crazy about bitcoin as we who are in the LMICs are. And we, do not bother to tell them about this as we feel it is not as important despite its benefits since bitcoin is not accepted in our country.

[cafter]

According to these, do you feel like Bitcoin has helped?

Yeah, sending money with bitcoin is often cheaper than other methods because the fees are lower.
but, you've got to keep in mind that there are still some fees for transferring bitcoin and converting it into the local currency of the country you're sending it to.
so, it's a better deal, but you have got to think about all the costs.

[apogio]

This feature is not limited to low and middle income countries. Anyone who engages in international transactions will appreciate using bitcoin as the channel.

Absolutely, but people in countries where salaries are higher tend to:
1. use banks a lot.
2. don't really care about the remittance cost because it doesn't look so scary.
3. don't pay such high remittance costs because these countries have bank arrangements that offer more reasonable fees. This sucks because it feels like the richer pay less in fees when transacting together.

I am from a low and middle income country. 9 out of 10 people I know do not use bitcoin to avoid remittance costs. It would have been a great option but our folks and friends who are outside the country in a developed, do not mind the fees mostly because they are not as crazy about bitcoin as we who are in the LMICs are. And we, do not bother to tell them about this as we feel it is not as important despite its benefits since bitcoin is not accepted in our country.

That's disappointing mate. I hope you can cope with remittance costs easily enough. This "our folks and friends who are outside the country in a developed, do not mind the fees" felt like a punch to the stomach to me... It is actually the points (2 & 3) that I mention in my answer to un_rank above.

Yeah, sending money with bitcoin is often cheaper than other methods because the fees are lower.
but, you've got to keep in mind that there are still some fees for transferring bitcoin and converting it into the local currency of the country you're sending it to.
so, it's a better deal, but you have got to think about all the costs.

To be honest, I didn't consider exchanging the Bitcoin to the local currency after receiving it. You are right... I wish we could use Bitcoin without needing to convert it back to local currencies.

[aoluain]

I do not use it for cross border transactions cause those I regularly transact with are not exactly excited about the prospects of bitcoin and refuse to use it, even for the singular purpose of receiving.
On a more general perspective, Bitcoin is cheaper and faster than other cross border channels for money transfer. For everyday expenses the transaction fee can be a burden ads it is now, but for larger transactions to farther distances it is the ideal option to use, showing that bitcoin can be scalable depending on how it is used.

This feature is not limited to low and middle income countries. Anyone who engages in international transactions will appreciate using bitcoin as the channel.

- Jay -

Thats a good point about people who are receiving Bitcoin from overseas, they might not
want to get involved with it either because of fear of the learning curve or not understanding
the process involved.

I can understand though how people would want to use the most economic way
of sending money across borders to a low to middle income country, every percent
saved makes a difference and Bitcoin can make that difference according to some
of the numbers in the OP's report.

[btc78]

my country has one of the highest remittances in the world from OFWs but 4% of the total money you’ll send will be deducted as remittance fee sometimes it can even go higher especially if you’re doing transactions in the bank

According to these, do you feel like Bitcoin has helped?

Yeah, sending money with bitcoin is often cheaper than other methods because the fees are lower.
but, you've got to keep in mind that there are still some fees for transferring bitcoin and converting it into the local currency of the country you're sending it to.
so, it's a better deal, but you have got to think about all the costs.

it’s definitely way lower in btc there’s probably only 1-1.5% transaction fee compared to the 4% of our traditional transfer fees in low-middle income countries that’s a huge difference

one of bitcoin’s benefits is how fast and easy it is to transfer money to a wallet due to its borderless characteristic

[apogio]

and Bitcoin can make that difference according to some of the numbers in the OP's report.

Can it? This is my point... I am afraid not many people use it.

[taufik123]

also it's easier to send Bitcoin from your wallet to the receiver wallet no matter where dey are and the transaction process is faster than that of the traditional financial system which may take days or even weeks

Easier and faster, yes! This is also true. I wonder though, how much time it takes to send a traditional remittance from a country to another. I have never sent one, so...

Cheaper and faster?
Probably about the same, Some remittance fees differ depending on the country.
Now sending Fiat money is easier using the E-Wallet App and is sent instantly on business days.
The fee varies around $7-$20 $3-$11 depending on the current exchange rate and the destination country chosen.

But the advantages of using crypto, all can be done instantly, the sending fee is lower (if there is no spike in transactions) and all can be done anonymously, without any identity.

But the obstacle at the moment is that those who work abroad don't really understand Bitcoin or crypto, they prefer to send through banks and some supported E-Wallets. The lack of crypto knowledge hinders real adoption.

[apogio]

The fee varies around $7-$20 depending on the current exchange rate and the destination country chosen.

Isn't it too expensive? Also, since I don't know the application, is it a flat fee or a percentage of the total transacted value?

[taufik123]

Isn't it too expensive? Also, since I don't know the application, is it a flat fee or a percentage of the total transacted value?

Yup, some may be cheaper, but some are more expensive, depending on the country.
If the country is still quite close it will be cheaper, but when sending to European countries such as the US,
it requires a fairly expensive cost and a long waiting schedule.

 There is also a limit for each money transfer that will be made.
It is not more efficient than Bitcoin and Bitcoin is certainly still cheaper.

Here's a comparison of the fees and how long it will take for the money to arrive, The name of the app is "Flip"

[apogio]

<~>

Thanks for the info. Looks like Bitcoin wins in all categories (fees, limits etc).

[Mr.right85]

According to these, do you feel like Bitcoin has helped? Do you use it to avoid all those remittance costs?

If Bitcoin actually negates all those % cost to sending money across to a party at an end, be it across border or not, the absence of fees makes it helpful but, it comes at the expense of revenue generation to the state.
While it might be helpful to an individual, it isn’t very helpful to the state but, that depends on what ends the % cut is actually directed to.

I haven’t got the chance to make a transaction across borders but it’s an option I’ll rather prefer than having yo go through the rigor of sending fiat across and having to fill forms across the counter in local banks.

Do it at home or anywhere is a choice we all sort out for in recent developments, Bitcoin has got that and that’s what we want/would be doing.

[Ruttoshi]

This feature is not limited to low and middle income countries. Anyone who engages in international transactions will appreciate using bitcoin as the channel.

Absolutely, but people in countries where salaries are higher tend to:
1. use banks a lot.
2. don't really care about the remittance cost because it doesn't look so scary.
3. don't pay such high remittance costs because these countries have bank arrangements that offer more reasonable fees. This sucks because it feels like the richer pay less in fees when transacting together.

Maybe, they are hodling their bitcoin investment and believe in making profit with it, such rich people will prefer using the bank because their bitcoin investment is a no go area since they have abundant of fiat. Another thing is that what if they don't have bitcoin because it is not every rich man that has bitcoin or accepted to adopt bitcoin.

I still see it that as long as it is across boarder payment bitcoin is the best because it safes time and doesn't need a third party to limit you from making your desired amount of transaction. The punchline is that the third world countries wouldn't use bitcoin for payment not because of the high transaction fee but because they see it more as an investment than a payment method.

[apogio]

The punchline is that the third world countries wouldn't use bitcoin for payment not because of the high transaction fee but because they see it more as an investment than a payment method.

That's a great thing about Bitoin. Isn't it? It can be used both as an investment and a payment method. I mean with FIAT you can pay, but because of inflation you can't just hold and wait for it to appreciate, since it will drop in value as time passes.

[GeorgeJohn]

Based on the transaction process Bitcoin Is a better option than using the traditional financial system, also it's easier to send Bitcoin from your wallet to the receiver wallet no matter where dey are and the transaction process is faster than that of the traditional financial system which may take days or even weeks
Yes to the average income earners I think having an easy financial Transaction system is a plus.

The only disadvantages of using bitcoin for transacting intercontinental is that the fee of bitcoin price is very expensive and even you are using 🏧  machines to send bitcoin across to another countries it will still be expensive whereas traditional currency you will not spend the charges you spend in bitcoin but the only difference is that Bitcoin will get you the destination you want very faster than traditional currency, most the charges of bitcoin do increase immediately their is a bullrun or change in bitcoin marketcap via increment.

[Crypto Library]

Undoubtedly Bitcoin or cryptocurrency is better from any other financial transaction system. However, sometimes Bitcoin transaction fees become high due to transaction congestion. Even if the transaction is less costly than the commonly used bank system.
So to answer your question it must be said that bitcoin is better option for all people from low class and middle class income country to people. But if you talk about remittance cost, remittance cost is given by the government of a country as a percentage of income. Accordingly, if the government brings any currency as remittance from a foreign country by evading taxes, it will be considered as black money by that government. Correct me if I misunderstood your question. Among the countries where cryptocurrency is legal, many countries levy a large amount of tax on income from cryptocurrency, which is a different matter.