There are palpable fears among money transfer providers across the world especially with the launch of El Salvador’s latest Bitcoin app, the Chivo Wallet, as analysts say it could ensure that money service providers such as Western Union and MoneyGram lose around $400m in remittance commission. Experts say that these remittance service providers could start losing customers and money.According to CNBC’s MacKenzie Sigalos, the loss in remittance commission could be close to $400m a year.
She said, “If you want to send $10 from Canada to El Salvador via Western Union’s app = $3.24 fee; Muun [to] Chivo wallet = $0.10; Chivo [to] Chivo = free. Present Bukkele’s new bitcoin wallet could cost co’s like Western Union $400m/y.”
According to CoinMarketCap, remittances account for a $6bn industry, almost 23 per cent of the country’s GDP. And money service providers like Western Union or MoneyGram are the chosen method of remitting funds to the country.
According to official data, about 60 per cent of remittances are through companies and 38 per cent are through banking institutions.