Can the NEAR protocol replace Western Union?

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We often hear about cryptocurrencies replacing banks and payment processors in the future. It’s a long way from the present to that point. payment networks such as Visas (NYSE:V) a MasterCard (NYSE: MA) not only have the resources to adapt to changing technology (as they are among the largest companies in the world by market cap), but they are also actively involved in cryptocurrency and are looking for ways to incorporate it into their integrate business models. Let’s start with an established entity in the legacy money transfer industry in predicting industries and companies that will potentially disrupt and replace cryptocurrencies. Western Union (WU -0.77%). Here’s why NEAR protocol (AS 4.89%) could replace 171-year referral support.

Image source: Getty Images.

Actor: Western Union

Western Union is a $7 billion company primarily facilitating payments and money transfers worldwide for businesses and individuals. Business services are often used for cross-border payments and transfers. An example of using Western Union might be a migrant worker sending a remittance payment back to his family in his home country. It is a useful service and serves as pulp for families and local economies in other countries. The World Bank estimates that global remittances to low- and middle-income countries will reach a record $630 billion in 2022. However, this market is ripe for disruption. Processing transactions in this way not only takes a lot of time, but also significant fees. A domestic transfer through Western Union is typically completed within 24 hours, while an international transfer can take one to five business days. Crypto, especially the NEAR protocol, could come in here and disrupt this model.

Intruder: NEAR protocol

The NEAR protocol testifies to a cryptocurrency with a market cap of $2.4 billion. Developed by a global community of developers called NEAR Collective, NEAR features high speed, near-instant billing, and low fees. NEAR uses its proprietary technology called Nightshade to scale and achieve an impressive throughput of 100,000 transactions per second. NEAR would improve Western Union transaction settlement time by an order of magnitude, as NEAR blockchain transactions are settled in around two seconds. Not only would recipients receive their money much faster, but they would also receive a much larger share of the money sent while consuming fewer fees. Transactions on the NEAR blockchain typically cost less than a cent. This is an attractive option for a worker sending money home to their family. For example, if you transfer $100, the family on the receiving end will receive $99.99 in a few seconds. Western Union offers a variety of options for sending and receiving money, which is convenient, but all options come with higher fees and take longer. For comparison, if I sent $100 to a recipient in another country using my debit card for the recipient to withdraw money from the store, I would pay a $4.99 fee and zero to four processing time have working days. . While $4.99 doesn’t sound like much, it’s an order of magnitude higher than the NEAR transaction fee and can increase over time for people who regularly send home transfers. The instant settlement time is also much more attractive and could have a significant impact on people who currently have to wait a few days to receive funds. Another advantage is that there are no “working days” in the crypt. The sender can send money on a Saturday, Sunday or public holiday and arrive at the destination at the same time as the business day.

acceptance curve

Not everyone will know or be comfortable with NEAR. It will be some time before NEAR replaces Western Union, but the more people around the world get access to the internet and smartphones, the more likely it is. The technological adoption curve means that technology often seems strange and clumsy at first, having been adopted by the first humans, until the masses eventually accept it and start looking at it as a default option. NEAR wallets have been designed to be accessible and easy to use and are available as extensions in popular web browsers such as Chrome.

Although we’re at least a few years away from NEAR’s true exchange of legacy payment options like Western Union, the transition is beginning. In early 2021, the NEAR blockchain was typically used for fewer than 10,000 transactions per day. As of June 5, 2021, there were 254,239 NEAR accounts. On June 5, 2022, almost 630,000 transactions were completed in one day. A year later, on June 5, 2022, it was more than 13 million.

Can NEAR replace Western Union?

Although the NEAR could face further challenges or regulation if mass adoption occurs, it’s entirely possible that the NEAR protocol could one day replace, or at least fundamentally disrupt, a legacy payment provider like Western Union. The NEAR would also need to become more stable to gain mass acceptance as its price has been volatile this year and has fluctuated between $3.10 and $20.39 over the past 12 months. However, with negligible fees of less than a cent and near-instant settlement times, NEAR offers a compelling reason to participate, and given the significant momentum in user growth and transaction growth, the technology adoption curve could eventually make NEAR a common payment option and remittance for everyday use from people all over the world.

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