If you’re a Burmese migrant worker living in Thailand–maybe making around $4 a day–you’re probably sending at least half your pay, or more, to your family back in Burma. But you probably also don’t have a bank account, so every transfer means taking a risk.
“Cost and trust are the main risk factors, as currency exchange and transfer fees may run in excess of 12%, while some of the informal transfer agents may disappear with the cash they are trusted [with],” says Alexi Lane, CEO and founder of a startup called Everex.
Everex is piloting a different solution for migrants based on the blockchain, the technology that records a secure digital ledger of transactions of cryptocurrencies like Bitcoin. When workers are paid in Thai baht cash, they use the Ethereum-based Everex Wallet app to exchange the money to digital “cryptobaht” or THBEX.
A minute or less later, the recipient in Burma can swap the currency to cash using a local money-changer (unlike some other blockchain startups, Everex thinks it makes sense to work with existing systems rather than completely replace them).
In a recent pilot, more than 100 migrant workers tested the app, transferring 850,000 Thai baht, or around $24,000, to family members in Burma.
“In the future, we plan to provide business owners who employ migrant workers with payroll solution using Everex Wallet,” says Lane. “This way workers will be able to send money home immediately right from the Wallet.”
Using a mobile app for cross-border transfers isn’t a new idea, but blockchain technology makes it more secure. The company also offers a full refund if a transaction doesn’t work.
Even for the minority of migrants who have a bank account, the app is designed to be more appealing, because users can avoid high fees, paperwork, lines at the bank, as well as less-than-favorable exchange rates. The app can be used by importers and exporters, online payments, and for paying taxes.
After the launch in Thailand, where Burmese migrant workers actively distrust both traditional banks and informal transfer agents, Everex plans to work with money services businesses in developing countries around the world.
Over 2.5 billion people either have no bank account or limited access; typical fees for sending money across borders are around 8%, a major expense for workers who are already barely earning enough to survive.
“We hope that the Everex product will help to overcome a lack of opportunity and economic underdevelopment and spur economic growth,” Lane says.