Philippine workers who receive their salaries from abroad feel a pinch not just from exchange rate fluctuations, but also expensive money transfer services. Addressing this problem are several new payment solutions, which are driving remittance costs down.
California-based Bitwage, for one, launched a Bitcoin-powered payroll service that allows American companies to pay workers outside the US in their local currencies.
The company struck a partnership with Philippine Bitcoin exchange Coins.ph.
Bitwage’s payroll platform accepts and pays out fiat money, but uses the Bitcoin blockchain for transferring.
Workers in the Philippine who sign up to the Bitwage system are automatically furnished with a bank account in the US where their employers can deposit their pay. Bitwage then leverages the Bitcoin blockchain to transfer the value from the US to the Philippines. Essentially, this removes several layers of intermediary institutions, which all take a cut in the payroll.
Via Coins.ph, the workers can choose to collect the remittance in Philippine pesos or preloaded cash cards. They may receive their payments through their mobile wallets, bank deposits, or door-to-door delivery.
See: Coins.ph users may now convert Bitcoin into cash using ATMs in the Philippines
Why the Philippine market?
Services such as Bitwage’s are advantageous to emerging markets like the Philippines for three main reasons: it caters to the unbanked, it’s quick, and it’s cheap.
In the Philippines, up to 73 percent of the population are still “unbanked” or “underbanked,” Bitwage quotes Shamina Singh of MasterCard Worldwide Center as saying.
It adds that money wiring firms and banks take days to transfer funds and charge up to eight percent of the transaction amount. The Bitcoin technology does it in less time and for 50 to 90 percent lower costs.
Jonathan Chester, co-founder and chief strategy officer of Bitwage, therefore sees bitcoin as the singular payment protocol for paying people across the globe. “From freelancers and small businesses trying to send and receive international payments to large enterprises looking to reduce the costs of internal foreign exchange rates, companies working internationally will ultimately be leveraging Bitcoin to cut costs and increase revenues either directly or indirectly with services such as Bitwage,” he explains.
The Philippines is the perfect market to pilot this kind of service. The country’s business process outsourcing industry – including call centers for banking or tech support – is projected to grow revenues to US$48 billion and double its employee number by 2020. The Philippines is also one of the top earning markets in terms of freelance work.
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