Did you know that a migrant worker from Sub-Saharan Africa pays the highest fees globally to send money home? According to the World Bank, transferring $200 to the area costs 8.5%. However, the problem is not limited to this part of the world: remittances ― sums of money sent in payment ― on an average cost 7% when transferred globally. As such payments are a critical source of funding for developing countries, the UN set a target to cut these costs to 3% over the next decade.

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Lowering the frictions of cross-border payments, particularly to those who need them most, is a noble goal. The problem is, cross-border payments have always involved a chain of intermediaries. When traditional banking costs too much to be inclusive, parties on both sides of a transaction are burdened with the inconvenience, risk, fees, and high costs of negotiating the handoffs and currency exchanges to get a transaction safely from sender to recipient. There are other barriers: according to an OECD paper, a key cost driver of international payments is compliance with rules for KYC. Despite the emergence of digital challengers, fees remain relatively high.

Blockchain holds the potential to greatly reduce the number of intermediaries required in cross-border transactions, making remittances cheaper and faster to execute.

Many hope cryptocurrencies can be used as a bridge asset. For example, instead of making pricey foreign exchange transactions between US dollars and South Sudanese pounds, a cryptocurrency could be directly transferred to the recipient who then can exchange it locally. By using smart contracts, blockchain could help reduce bureaucratic overhead and partially automate regulatory compliance.

Blockchain Barriers

Blockchain has fallen short of its potential for the following reasons:

  • Impractical

    The average user struggles to manage wallets and private keys on their own, whereas centralized exchanges charge additional fees.
  • Volatile

    The extreme volatility of cryptocurrencies like Bitcoin make them unviable for everyday transactions.
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  • Rigid

    Most existing blockchain solutions cannot handle the transaction throughput required to operate a payment network.
  • Insecure

    Existing blockchains using Proof-of-Work (PoW), Proof-of-Authority (PoA), or Proof-of-Stake (PoS) consensus mechanisms offer between 33% and 50% Byzantine Fault Tolerance (BFT), which could be potentially breached by a well-financed and coordinated cyberattack, particularly by a state actor.

The Geeq Difference

Radically increasing speed while reducing transaction costs for payments and remittances down to fractions of a cent.

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  • Inexpensive

    Geeq offers low transaction fees, even for very small, frequent payments.
  • Stable

    Geeq places strong emphasis on reducing uncertainty and minimizing volatility in transaction fees.
  • Scalable

    Geeq’s Proof-of-Honesty consensus mechanism does not rely on mining, enabling high transactional throughput with less latency, while consuming far fewer resources than traditional blockchain solutions.
  • Secure

    Financial transactions require bullet-proof security. The degree of security provided by Geeq – using mechanisms like the Good Behavior Bond and Proof-of-Honesty – is unrivaled.
  • Flexible

    Different countries and their people have access to varying degrees of connectivity. Geeq’s unique technology provides a range of solutions to work for those with intermittent access.
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Geeq™ Payments – Remittances

The World Bank — Using Blockchain to Further its Mission

Geeq™ at The World Bank

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