To remove the barriers related to international remittances and allowing cryptocurrencies like bitcoin to be more accessible to common and casual users, South Korea’s largest cryptocurrency exchange, Bithumb has partnered with cryptocurrency payment processor Bitpay. The partnership will enable large-scale international remittance payments between South Korea and the west.
Sonny Singh, Chief Commercial Officer at Bitpay expects that through this partnership, the company is on track to process $4 billion worth transaction in 2018 and to target the $200 billion remittance industry between South Korea and West.
In an interview with CNBC, Mr Singh told: “Cross-border payments in South Korea and the west [have become] a $200 billion industry this year. Bithumb is obviously one of the largest exchanges in the world.”
Many remittance companies since 2014 have attempted to utilize cryptocurrencies to process large sums of payments, given the expensive cost of fees and limited reach of traditional remittance service providers like Western Union and Moneygram. Also, these remittances companies don’t serve the rural centres which limit its reach and becomes time-consuming and costly for people living in those areas.
For many years, since 2014, several remittance-focused companies have attempted to utilize cryptocurrencies to process large sums of remittance payments, given the expensive fees and costs paid by both remittance senders and receivers when using existing remittance service providers like Western Union and Moneygram.
The partnership between Bitpay and Bithumb will allow users to process international remittance with a 1 percent fees and guaranteed settlement time of 1 day.
Mr Singh explained:“We’re trying to make it so that people can get money cheaper and quicker from suppliers internationally. So right now, someone in South Korea can pay a million-dollar invoice in the United States using Bithumb to buy bitcoin and pay the invoice, and BitPay will process that invoice and settle in US dollars the next business day.”
The international remittance market is huge and has a lot of opportunities. While Bitpay and Bithumb are focusing on targeting the South Korea-to-US remittance market, other companies like Kakao, South Korea’s largest internet conglomerate is focusing on Asian market which is valued at $500 billion.