On 9 September, Standard Chartered Bank announced its blockchain cross-border remittance service, created with Bangladesh’s mobile payments firm bKash and Malaysian fintech Valyou. The blockchain solution is powered by Ant Group, which also owns China’s AliPay. The service is currently in the final stages of testing, and will soon be available to Bangladeshi and Malaysian customers.
CEO of Standard Chartered Bank Bangladesh, Naser Ezaz Bijoy, acknowledges the vital role remittances play in driving the Bangladeshi economy, and supporting families in Bangladesh. In fact, Bangladesh remittances reached a record high of $1.83 billion this June. Malaysia plays a particularly important role, with over 220,000 Bangladeshi workers estimated to be working there in 2017. The blockchain solution allows these Bangladeshi workers in Malaysia to instantly send wage remittances through Valyou, to bKash wallet users at home. Standard Chartered will act as the settlement bank and regulatory approval holder.
Currently, the total cost for sending money back to Bangladesh ranges from 1.85% (Western Union, internet only) to 11.78%. In Q2 2020, the average cost was calculated to be 4.03% by the World Bank. Standard Chartered Bank was ranked third most expensive with remittance costs of 8.6%. On the other hand, Valyou’s charges are significantly lower, at 2.87%.
The blockchain solution’s focus does not appear to be solely about reducing the cost of remittance, instead the focus is on making the process easier. The solution will help streamline the process, improve delivery speed, data security, and transparency. CEO of bKash, Kamal Quadir believes this “technological integration will bring great convenience to both recipients and senders and will contribute further to our foreign remittance earnings.”
CEO of Valyou Prasanna Rao echoed this response, also pointing to the benefits of the service during the pandemic. Rao said, “this blockchain integration will save cost and time without compromising the safety and security of the remittance transaction sent from Valyou to bKash. “
bKash is backed by the World Bank’s International Finance Corporation, the Bill and Melinda Gates Foundation and Ant Group, amongst others.
Meanwhile, Ant Group, formerly known as Ant Financial, previously launched a blockchain remittance service app to transfer money from Hong Kong to the Philippines. Standard Chartered Bank also acted as the settlement bank. Two months ago, Ant Group announced plans for an IPO. The listing is likely to be large, with an expected market capitalization of around $200 billion. To put that in context, Goldman Sachs’ market capitalization currently sits at around $70 billion and JP Morgan’s is $307 billion.
