Crypto Service Send Global Revolutionizes Money Transfer Market – Crypto Projects to Watch 2023

Denunciations of the real utility of cryptocurrency are often based on the assumption that money works the same way around the world as it does in the United States.

Critics – including powerful US lawmakers – often cite the convenience of services like PayPal or even credit cards as evidence that cryptocurrency has no use. But that ignores the very real differences between nations’ financial infrastructure — and how many places PayPal or other services simply don’t reach.

These barriers are much more obvious for people who do a lot of small-dollar international transactions, such as immigrants sending money home. Use of traditional financial infrastructure for these so-called “remittances” is often dependent on complex and high levels of trust between banks. This complexity has made it easier for conventional money transfer services to charge sometimes extremely high fees.

For example, according to the World Bank, the cost of remittances to Nigeria has averaged close to 8% over the past decade. It is increasing dramatically: in 2020 and 2021, almost $3 billion was spent on remittances to Nigeria alone. Given Nigeria’s GDP of about $440 billion, the lack of money is enough to put a strain on the national economy.

And while Nigeria is a major recipient of remittances, it is only a small piece of the pie: Global remittances in 2022 were $626 billion. Cutting just 1% from the fees on these transfers would put an additional $60 billion in the pockets of people who need it.

As the crypto winter set in during 2022, the crypto industry talked a lot about the “pivot to BUILD” that often follows when the most degenerate forces in the industry are blasted and quiet down a bit. Strike’s new Send Globally service, launching in December 2022, embodies some of the biggest promise of this bear market urge.

Send Global is solving a real world problem using cryptocurrency. It leverages the Bitcoin blockchain and the Lightning Network to offer international money transfers that are faster, more flexible and often less expensive than those offered by traditional financial services. It is designed to be easy to use and understand for people who know nothing about crypto.

Most importantly for the direction of the crypto industry, Send Globally has an honest-to-god business model: a sustainable approach to generating revenue in exchange for real services, rather than through selling speculative tokens or crazy financial techniques. Given the ongoing regulatory crackdown and post-bubble skepticism facing crypto, it’s more important than ever for projects to focus on real, paying end users.

“You send money that you see as dollars from the United States, and it is received on the other side. They receive it in their local currency, either in a bank or on a mobile account,” explains Manuela Rios, Strike’s product director. Rios, who joined Strike from Robinhood Markets in December 2021, knows the challenge of money transfers intimately. Her grandmother lives in Colombia, and Rios describes having to jump through expensive or complex hoops every year to send her abuela a simple gift of birthday money.

Bitcoin itself is already a meaningful solution to that problem, given transaction fees of around $2 to send any amount of BTC. But it still poses challenges for trust and ease of use for many.

“If I’m going to send money to my grandmother,” as Rios puts it, “I’m going to have a hard time convincing her to use bitcoin.”

Send Globally is designed to split the difference, giving people who know nothing about crypto access to some of the benefits in speed, cost and flexibility. Strike has partnered with a number of local businesses that connect Bitcoin’s Lightning Network to local banking services, including Pouch in the Philippines and GetBit in Vietnam.

By connecting directly to local financial services, Send Globally makes its Bitcoin transactions feel, to the end user, largely identical to a conventional bank transfer. In particular, it significantly reduces the volatility risk of bitcoin because BTC is held for a very short time at both ends.

Send Globally began operations in December with service to Ghana, Kenya and Nigeria. As a good example of the seamless local integration, Send Globally in these regions can direct funds not only to conventional bank accounts, but to “mobile money” services, especially M-Pesa. Launched in 2007, M-Pesa allows users to access money through even simple flip phones, and has become a major part of financial life across much of Africa.

Strike has since added service to the Philippines and most recently Vietnam. In total, Rios says, approximately 500 million people outside the United States have access to Send globally. Currently, the service is one-way – you can send dollars from the US to receiving countries, but not in the other direction.

Using Bitcoin’s Lightning Network as a payment rail dramatically reduces the already low cost of a Bitcoin transaction: sending over Lightning costs pennies or less. But the added convenience of local bank connections and automatic bitcoin-to-fiat conversion adds some costs of its own. So Strike is careful to claim that Send Globally is cheaper than existing alternatives in any case, especially citing temporary “teaser prices” for conventional money transfer services that are sometimes cheaper. Strike’s income from Send Globally comes in the form of an exchange rate spread.

Rios says Send Globally’s basic design was influenced by Strike’s involvement in El Salvador’s bitcoin push since 2021. That year, Strike released its Lightning-based payment app in El Salvador in conjunction with the introduction of bitcoin as legal tender there. (Strike’s app is different from the troubled “Chivo” app released by the Salvadoran government.)

“The way Send Globally differs,” says Rios, “is that in El Salvador, [funds are sent] to a Strike app. Send Globally goes to their bank account, so it’s a much different experience. What we have found is that there is a much lower barrier to entry.”

There are other benefits to sending globally that make it different from standard remittance services. Perhaps most compelling, because it runs on Lightning and uses a spread-based revenue model Send Globally can be used for very small transactions. It is simply not possible with services such as Western Union which often charge fixed fees for transfers, making smaller consignments financially impractical.

“You can send as little as a dollar,” says Rios. “It makes it so easy to try out, and it opens up many new areas of use.”

Rios describes casually pitching Send Globally to a US-based Nigerian influencer. “He tried it and in about two minutes he texted back in disbelief. He was impressed by how easy it was.” For now, Strike says it relies more on word of mouth than paid marketing to promote the service.

That “two minutes” may not be an exaggeration, thanks to Send Global’s other major advantage over conventional transfers: speed. “It gets to the receiver immediately,” says Rios, meaning between a few seconds and a few minutes. In most jurisdictions this includes fiat settlement even outside normal banking hours and on weekends.

Rios says Send Globally is poised for rapid expansion, in part because of the abundance of companies around the world already working with the Lightning Network.

“We thought there weren’t that many. As soon as we launched in the three African countries, we started getting messages – “We are a lightning company in Columbia, in Mexico, in Ukraine.” They are everywhere. Because Lightning is open source. We can hardly build fast enough.”

While Strike CEO Jack Mallers has made headlines as a fervent bitcoiner, Rios says Strike is not interested in explicitly leveraging Send Globally to create new bitcoin conversions.

“Overall, our mission is better money,” she says. “In the app, we make the differences between cash and bitcoin balances clear,” and the interface doesn’t try to push people to cross that gap.

In the long term, of course, it aligns with a crypto future that even many diehards support: a world where crypto and its benefits are widespread, but many users have no idea they’re using crypto at all.