Bitcoin enters the $25B yearly Philippine remittance market

[qwerty555]

This group  coins.ph  

https://www.facebook.com/coinsph

https://coins.ph/

now allows overseas workers to remit monies to relatives scattered all over the Philippines thru a network of 3,000 branches of existing remittance /collection offices. This is new and probably just before the May 2nd post of their FB page.

Method asppears to be
- buy bitcoin in a foreign country
- sell it to coins.ph
- have the fiat picked up by relatives at one of the 3,000+ branches the next day

The remittance market in the Philippines is $25 billion a year in 2013  

http://www.philstar.com/business/2014/02/17/1291769/remittances-hit-record-high-25.1-b-2013

a target of 1% of this market in its first year would give $25M  with a 5% margin/spread or $1.25M gross. Clearly a vast amount of advertising would be needed to achieve this ..and here is some free with my (unconnected) compliments  

points to note

1 Although there is no fee there is an approx 5-6% spread on the buying and selling to and from fiat.

2. I have been told that Western union costs are in the 9-10% range including fees and exchange rate for a similar service, so this is at least very competitive or even cost saving.

3 The advantage this services appears to offer is the 3,000 plus existing collection offices and this is a truly serious advantage.

this model is ripe for copying in places like India and Mexico  who are in the top ten

https://www.google.com.ph/search?q=philippine+remittances+2013&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a&channel=sb&gfe_rd=cr&ei=ukp0U72fK9LD9AXx9oGQBA#channel=sb&q=which+country+topped+the+global+remittances+list+for+2013&rls=org.mozilla:en-US:official

I hope to see more like this.

[NLNico]

For the Philippines there are indeed alternatives:

https://coins.ph/
https://www.coinxchange.ph/
https://buybitcoin.ph/

The latter only accepts few banks. First 2 more banks and also LBC, cebuana, which is why there are 3,000 branches. These options do have an additional fee though, compared to bank transfers.

I have calculated the options for myself compared to other remittance services and by using Kraken as deposit option and coinxchange.ph to my PH bank, it would save me around 1 - 2 % which is pretty much I guess. For small amounts it can save much more than 2% btw.

[beetcoin]

for whatever reason, it sure seems difficult to get money remitted to the philippines.

and 25B is quite a bit of money.. if the average non-tbc remittance fee were 3%, that'd still be almost $1b they would save in fees.

[Fdt]

Good luck competing with tons of established and very competitively priced remitters. Many of them offer door to door services

For remitters its extra cost to add btc since payment processor wants % to hedge exchange rate risks. BTC and crypto currencies in general at the moment are more suitable for services such as web hosting and eCommerce imo

[qwerty555]

For the Philippines there are indeed alternatives:

https://coins.ph/
https://www.coinxchange.ph/
https://buybitcoin.ph/

The latter only accepts few banks. First 2 more banks and also LBC, cebuana, which is why there are 3,000 branches. These options do have an additional fee though, compared to bank transfers.

I have calculated the options for myself compared to other remittance services and by using Kraken as deposit option and coinxchange.ph to my PH bank, it would save me around 1 - 2 % which is pretty much I guess. For small amounts it can save much more than 2% btw.

Thanks..I will look into those.

The accepting banks in the Philippines is primarily for buying BTC in the Philippines and I doubt if that would catch on for domestic remittances as its easier to walk into a pdala branch and send home. For overseas workers the Philippine banks that accept fiat for bitcoin purchases will have little relevance as they will be buying in the USA /UK /middle east etc and selling to coins.ph online from  wallet to wallet

I am not aware that coins.ph will charge additional fee for the remittance to a provincial branch for pick up, i assumed that cost was included in their spread. I will ask them to clear that up.

Re bank to bank transfers..this can be slow..i had a ukp 5,000 remittance from London "lost" in the system somewhere in new york for 6 weeks . they also often hit hard with the exchange rate. bitcoin should be faster.



I will look at your kraken method as this may be cost effective for my personal purchases of bitcoin    TY

[NLNico]

The banks I said was about the withdrawals. So to sell bitcoin and send it to your PH bank.

I assume the avg OFC or remittance process will be:

- deposit fiat and buy bitcoin in EU/USA at coinbase/kraken/bitstamp/etc
- send bitcoin to 1 of these PH "exchanges"
- withdraw to PH bank or 'huiller/LBC/Globe/etc.

Fdt is correct and there are remittance services that are not that expensive. In my calculations only Kraken (0,2% fee) with coinxchange.ph (seems you get less PHP for your BTC at coins.ph) and bank-withdrawal (no extra fee) seems more cheap than my pretty cheap remittance service. If I use Bitstamp that has a 0,5% fee and some EUR>USD converstion, it is already not worth it or even more expensive.

[oXo]

Amazing. Bitcoin clearly is moving in big steps toward useful adoptation (fiancial being the most important of those) and therefore driving up the price in a more sustainable manner.

[bryant.coleman]

That is a wonderful step forward. Some of the East Africans (especially those in Kenya and Tanzania) are already using Bitcoins to send in their remittances. Time has come for the Filipinos to try out this method.

[qwerty555]

The banks I said was about the withdrawals. So to sell bitcoin and send it to your PH bank.

I assume the avg OFC or remittance process will be:

- deposit fiat and buy bitcoin in EU/USA at coinbase/kraken/bitstamp/etc
- send bitcoin to 1 of these PH "exchanges"
- withdraw to PH bank or 'huiller/LBC/Globe/etc.

Fdt is correct and there are remittance services that are not that expensive. In my calculations only Kraken (0,2% fee) with coinxchange.ph (seems you get less PHP for your BTC at coins.ph) and bank-withdrawal (no extra fee) seems more cheap than my pretty cheap remittance service. If I use Bitstamp that has a 0,5% fee and some EUR>USD converstion, it is already not worth it or even more expensive.

lol ok. you have prompted me to do a bit of research. based on the below 2012 report

Summary..1) it is often the exchange rate that pushes the cost of remittance up and the true costs are difficult to establish and compare because of this variable.
              2) It is frequently not the cost , but the ease of remittance and access to direct customer service that are the main factors when choosing method of remittance
              3) Banks are the least favorite remittance  option

Conclusion..if a bitcoin remittance service is to go mainstream ( that is not to say it cant work to some degree in a niche part of the market) it needs to be made very very easy ( non tech) to use. eg. get a card..load it with bitcoin at a bitcoin atm or representatives office who can do it for them and send the coins with a push of a button or have the representative do it for them.  does that sound sensible?

http://www.consumersinternational.org/media/886482/the%20remittances%20game%20of%20chance.pdf

The remittances game of chance:
playing with loaded dice?
January 2012

Transparent pricing
The current industry standard allows for opaque pri
cing, which obscures unfavourable currency
conversion rates, hides the real cost to the consum
er and makes it almost impossible for the
consumer to ‘comparison-shop’.

Whilst price-comparison sites tend to show a range
of different MTCs and different methods of
sending money internationally, it is probable that
the ‘real choice’ facing many migrants is much
smaller. Due to the migrants low use (and in some c
ases active distrust) of banks,
27
the most popular
formal method of sending money is a cash-to-cash tr
ansfer through a money-transfer company as the
intermediary.
28
A survey of Latin America illustrated that only a
third of money-transfer recipients have
a bank account.
29
The accessibility of sending and receiving outlets,
both in terms of geography and opening hours, is
also a factor, and migrants are also less likely to
have access to the internet (or may be unwilling t
o
pay an additional charge to use a computer in an in
ternet cafe).
Thus, not surprisingly, in a 2010 survey of 1,000 r
emittance senders living in the US, 90% utilised
MTCs for cash-to-cash remittance transfers. Only 3%
used banks, 2% utilised the internet and 4%
used another means.
30
The implications of these factors may be considerab
le.




I. Opaque pricing
Remittances services providers make money by chargi
ng the consumer transfer fees, which are
normally a fixed fee based on the amount of money b
eing sent and the destination (with more popular
destinations usually costing less). MTCs also make
a
secondary
profit in a manner that is not clearly
communicated to the client. The MTC purchases forei
gn currency at one rate (determined by currency
market variations and impacted by the ability to bu
y in large volumes), and then effectively resells t
hat
currency to the consumer at a less favourable rate.
Thus, the MTC makes money on the difference
between currency prices available to them in wholes
ale currency markets and the price at which they
‘sell’ it to the consumer. In the remittance parlan
ce, this difference is called the
exchange-rate spread
.
In fact, in Western Union’s 2010 Annual Report, the
corporation states that “
we
primarily
[emphasis
added]
generate revenue based on the difference between t
he exchange rate set by us to the
consumer ... and the rate at which we are able to acq
uire currency”
.

[qwerty555]

That is a wonderful step forward. Some of the East Africans (especially those in Kenya and Tanzania) are already using Bitcoins to send in their remittances. Time has come for the Filipinos to try out this method.

not surprising and good luck to them..from the above 2012 report

5
Bank, it cost on average 6.87% to send funds from t
he United States to Mexico but 38.94% to send
money from Ghana to Nigeria, and a whopping 47.24%
to send money from Tanzania to Kenya.
6
The wide disparity in remittance costs begs the que
stion: does it cost the leading MTCs so much
more to send money using the same technology and me
thodology from one country to the next or do
they charge more simply because they can?

[Soros Shorts]

I see a lot of potential here, especially in situations where currency controls and embargoes are in effect. The Philippines market though seems to be saturated with non-Bitcoin based incumbent players. Nevertheless, if Filipinos can save a few % in fees all the better for everybody.

I also wish people would think more about developing solutions for these types markets than say, micro transactions and how to get hipsters to pay for their vegan latte using their iPhone wallet.

[bryant.coleman]

I see a lot of potential here, especially in situations where currency controls and embargoes are in effect. The Philippines market though seems to be saturated with non-Bitcoin based incumbent players. Nevertheless, if Filipinos can save a few % in fees all the better for everybody.

The Filipinos working in countries such as Singapore, Middle East and Hong Kong are paid much below the American or European level of wages. And out of that, they have to give 12%-13% as fees to the Western Union. Bitcoin based remittance system can end this exploitative practice.

[Ron~Popeil]

3rd and 2nd world remittance is one place where bitcoin could really shine. Giving these people access to global monetary system would bring more than just increased acceptance and use of bit coin. It can bring economic freedom and hope. The current money transmitting industry is a group of vampires capitalizing on human misery.   

[Sandia]

deleted.  I slammed the wrong company.

[qwerty555]

[/quote]


I am not aware that coins.ph will charge additional fee for the remittance to a provincial branch for pick up, i assumed that cost was included in their spread. I will ask them to clear that up.


[/quote]

It has now been clarified and this is their response

 Yes, we do charge additional fees for some of our pay-out options, specifically: - pay-outs via third-party remittance services like Cebuana Lhuillier and LBC - pay-outs via mobile money transfer/GCASH - Metrobank deposits Our other pay-out options (i.e. pay-outs via almost all banks, with the exception of Metrobank, which charges Php50 for deposits) are free. We only charge pay-out fees when there is a cost for using the third-party services. Both Cebuana Lhuillier and LBC have tiered fees, depending on the amount being remitted, starting at Php7 and Php6 for Php100 respectively. What they charge is what we charge. In effect, we are asking our customers to shoulder the cost of using the third-party service. We really appreciate you clarifying this with us, because it lets us know that our pricing system may be confusing some of our customers. I will add an FAQ post/update the help texts to hopefully make things more transparent/easier to understand.



so there we are...

I look forward to hearing positive feed back about it in coming months..and remind them that eventually  customer service outlets/representatives who deal directly with those remitting in the foreign country seems to be the way to go mainstream if the 2012 report above is correct in  its findings

[beetcoin]

3rd and 2nd world remittance is one place where bitcoin could really shine. Giving these people access to global monetary system would bring more than just increased acceptance and use of bit coin. It can bring economic freedom and hope. The current money transmitting industry is a group of vampires capitalizing on human misery.  

bitcoin seems to help 3rd world countries the most. helps then against getting raped by countries like ours, or even their own government when they run up the value of their currency. i don't think bitcoin is going to solve many major world problems, but it'll help some people who need its services.

[moni3z]

There's more money to be made transferring money out of the Philippines. Currently it's expensive as balls to wire anything, and subject to brutal government scrutiny/corruption. Transferring money there is dirt cheap and simple, I can send up to $5k USD for tiny fees at the 8 different Php money transfer store front places around my apartment block, or online with one of the dozens of instant methods. However moving your money out of there is subject to a lot of hassle and fees.