Visa Europe's innovation hub is teaming up with distributed ledger specialist Epiphyte on a proof of concept project looking into how the blockchain and bitcoin can be used for international remittances.
Conceding that traditional payment rails are far from ideal for remittances, Visa Europe Collab is turning its attention to a new technology that has long been touted as a cheaper and simpler alternative for moving funds across borders.
A report from the World Bank last year put the global amount of remittances in 2014 at $582 billion and estimated that migrants paid an average of 7.9% in fees on these money transfers.
"There is a real opportunity to develop an improved remittance service for both the sender and receiver of payments in terms of fees, speed and ease of use," says Jon Downing, innovation partner, emerging payments at Visa Europe Collab. "That’s why we’re proactively exploring the area with Epiphyte, to see if the protocols and processes involved could be improved by utilising blockchain technology."
The proof of concept is already underway and over the next two months will see a controlled test environment used to run real-world transaction using bitcoin as an alternative to conventional remittance processing.
Edan Yago, CEO, Epiphyte, says: "International remittances are vital for millions of families across the world, but they can be expensive, cumbersome and slow. We believe that blockchain technology has the potential to change all of that, but we need to find a way of making that technology work for the mainstream financial world.
"By combining Visa’s experience as the largest payments network in the world with our experience of the distributed ledger we’re hoping we can work together to reshape this sector for the better."