Velo, a blockchain remittance service based in Thailand, is looking to help revolutionize Southeast Asia’s lucrative market of cross-border remittances.
As reported by Fortune, cross-border remittance is booming business, with over US$65 billion remitted into the region each year and an additional US$18 billion worth of annual transfers carried out locally.
Of the more than 21 million migrant workers in Southeast Asia, around five million are currently in Thailand. Notably, the average service fee for cross border remittance services in the kingdom is 15% – well above the regional average of 9%. The process can also take up to five days to complete using traditional methods.
Velo aims to charge transaction fees as low as 1% for its service while promising to complete transfers instantaneously.
Other blockchain firms have also been active in the region’s remittance space, including as U.S.-based crypto-company Ripple, which is collaborating with Thailand’s Siam Commercial Bank and others to bring its remittance scheme to Asia. Alibaba’s AliPay meanwhile recently launched blockchain remittances in Hong Kong, targeting the city’s 300,00 foreign domestic workers.
Tridbodi Arunanondchai, Velo’s vice chairman, has said Velo will not compete directly with incumbents such as Western Union or even newcomers like Ripple. Instead, he said Velo will position itself as a business-to-business (B2B) service, providing digital infrastructure to facilitate transfers.
Although the service has only raised US$50 million in funding, it is counting on its association with CP Group, Thailand’s largest private conglomerate, to shore up trust with business partners and customers.
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