Over 15% of Americans may have sent cryptocurrency abroad, highlighting the significance of adoption, particularly in Latin American countries.
According to a survey conducted by token-based platform Clovr, 15.8% of Americans have used cryptocurrencies to send funds across borders. This ranks fourth in popularity behind more established remittance methods such as online payment services, money transfer services, and traditional wire transfer (ranking in at 51%, 50.9%, and 25.7%, respectively). Additionally, cryptocurrency transfers ranked higher than other forms of payment such as prepaid card, check/money order, and cash in the mail, indicating a rising trend towards more modern, borderless, digital solutions.
Transfer fees for traditional remittances ranked significantly higher than crypto
Of particular significance in the survey’s findings was the high average cost of sending money abroad. Using popular remittance services reported average fees in the 3.2%-10.41% range, with averages fees for a single transfer as high as $52. Most dramatic is the average yearly fee for remittances reported by survey participants: $585.99. This indicates that users switching to a more economical and newer method of overseas transfer could potentially save users hundreds of dollars annually, resulting in more funds available to remit to friends and family members in need.
Cryptocurrency transaction fees rank significantly lower. For example, Dash’s median fee is a tiny fraction of a cent at present, while Litecoin ranks closer to the one penny mark. While a more popular network, Bitcoin fees are on average about 7 cents today, however a little over a year ago they reached as high as a $34 median fee during times of intense network congestion, presenting a significantly less competitive model vs. traditional remittance solutions.
Little education and weak merchant adoption as primary barriers to crypto remittances
The Clovr survey also indicated reasons why some users may have stayed away from cryptocurrencies. According to the survey, the highest reason for non-users to have reservations about the technology was a lack of sufficient knowledge, at 41.2%, while worries that the recipient will not be able to find ways to use cryptocurrency ranked in second place at 38.3%.
At present, Dash claims over 4,600 merchants worldwide listed on DiscoverDash, with 2,552 listed in Venezuela alone, Colombia also potentially ranking as high as 333, both locations popular remittance corridors. In addition to addressing reservations of recipients unable to spend cryptocurrency, higher merchant adoption rates also translate to lower fees as users are not required to first transfer their funds into a more established currency, which can eat away at the cost-based competitive advantage provided by Dash. Additionally, the most popular use for spending remittances was reported as food at 41.4%, which also comprises one of the top two most popular business category according to DiscoverDash.
Finally, the Dash ecosystem aims to address the education barrier by offering a variety of support options for new users. Earlier this year Venezuelan-based teams added a live support desk in the country, which has since expanded to several languages. DiscoverDash similarly added a live chat feature to support user and newcomer questions. The main Dash website also added a support portal this summer, as well as an accessible documentation resource.