Here’s How Crypto Provides a Lifeline for This Bahamian Payments Company

The Latin American region faces the high costs and challenges of traditional settlements, as people sending money to close people have to deal with high transfer rates, and a portion of the population is still unbanked.

However, recently DevelopmentIsland Pay, a Bahamas payments company, is now incorporating cryptocurrencies for remittance transactions to make it an easier and cheaper process.

Island Pay is set to introduce a crypto wallet that uses the stablecoin USDC as a medium of exchange. The payments company plans to launch the CiNKO wallet in over 30 countries.

Catering to users in the Caribbean and LATAM regions, the wallet will enable individuals to transact with merchants, pay others (including those without bank accounts) and fund pre-paid cards.

Richard Douglas, CEO of Island Pay, said:

We aim to continually seek ways to advance financial inclusion in the region and enhance the financial experience for both unbanked and underbanked populations.

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Crypto has revolutionized the remittance landscape, furthering financial inclusion

By integrating crypto for remittance, Island Pay demonstrates its commitment to fostering financial inclusion and enriching monetary experiences for both the banked and unbanked individuals in the region.

The inclusion of this technology will lead to a significant reduction in international money transfer fees. Users will not be charged fees when receiving the USDC stablecoin on CiNKO. However, depending on the blockchain network used for the transaction, they may face gas fees.

The demand for crypto transactions has increased due to the existing challenges in traditional remittance methods. According The average cost of sending $200 to the World Bank can be up to 6.2%. Additionally, these transactions often take several days to process through traditional financial intermediaries.

As noted in a recent report by Circle, the technology has the potential to reduce the cost of sending money abroad by up to 80%. The report predicts that blockchain’s potential to increase cost savings for financial institutions engaged in cross-border transactions will reach a market capitalization of $10 billion by the year 2030.

Even before this, the Bahamas boasted a well-established presence in the fintech sector, with various global payment platforms and crypto wallets operating in the region.

Refos exposure The remittance and payments sector is currently the fastest growing fintech segment in LATAM. The rise in smartphone adoption and connectivity has also played a key role in driving innovation and progress in these areas.

Latin America and the Caribbean saw significant growth in remittances, despite higher fees with traditional channels. There is an increase of 27% in 2021 and 11% in 2022, for a total increase of $145 billion over 2017.

The region’s GDP is expected to slow to 3.3% this year, but remittances are expected to reach an all-time high.

Featured Image from Freeman Law, Chart from Tradingview.com