A proof-of-concept based on a simulation of real remittance transactions, created in partnership with the blockchain start-up Epiphyte, will be ready in two months, says the company.

Visa Europe is a subsidiary of Visa Inc., grouping almost 3,800 European banks and other payment providers. Epiphyte is an enterprise providing blockchain-powered software for various finance companies, ensuring the connection between traditional finance and cryptocurrencies. In 2014 it was proclaimed fintech start-up of the year by SWIFT and received banking innovation award from BBVA.

Their partnership is expected to produce a new remittance solution based on bitcoin and blockchain. The idea is to combine Visa’s long payment experience and Epiphyte’s knowledge of open ledger. Both companies agree that the blockchain technology can “develop an improved remittance service for both the sender and receiver of payments in terms of fees, speed and ease of use,” but only if a mainstream finance company takes part in the project.

Remittances are often considered to be “the killer app” of bitcoin. Tens of millions of people worldwide live far from home and send money to their relatives. Remittances by such companies as Western Union or MoneyGram are expensive and not very quick. Theoretically, bitcoin remittance is instant and free of charge.

However, according to a number of industry leaders, the cryptocurrency, while speeding up cross-border money transfers, still cannot make them cheaper because of the bulk of expenses situated at the first and the last miles of the transfer. Luis Buenaventure, formerly co-founder and one of the directors of Rebit.ph, believes that the only way to reduce remittance costs is to convert money not in cash but in a local virtual currency such as mobile money. Future will show who was right.

 

Alexey Tereshchenko