Whenever we think of making international or national payments, the very first thing that comes to our mind is the banking sector. After all, these are the safest ways to transfer money. However, the only flaw of this method is that you have to pay for their services.
Over the centuries, banking networks have been the only network that has offered transaction services. But it seems that the market’s monopoly poses a threat with the introduction of the new form of digital currency, Bitcoin.
Bitcoin is the first officially recognized digital currency that works on a blockchain network. Blockchain is a public ledger network that is open to the members of the network.
Traditional Money Transfer Method
Traditional money transfer methods are time-consuming processes that take days to weeks to complete one transaction. You first have to visit the money transfer location and fill out the important details. The authority will take detailed information and money, and they will do everything else to ensure that money reaches the top desired location or people.
The authority charges a service fee. The charge may vary depending upon companies and in emergencies. Normally, to complete the whole process, it takes ten days.
Today the same process is done with the help of digital banking platforms (Internet Banking). You have to follow the same process, but instead of going to a money transfer location, you will be logging in to the Banking website.
Digital Money Transfer method
Let’s have a look at what it would be like to make transactions in the form of Cryptocurrencies. We are taking that you do not have an account or Crypto asset, to begin with.
Your first job is to register on CryptoGroup. Once you have registered your account on the Crypto trading platforms, you will get two private keys: a private key and a Public key. These two keys will help you with the Crypto based transactions.
How Is Bitcoin Posing Challenges To Money Transfer Companies?
After seeing the popularity of Bitcoin growing every day, traditional money transfer companies are facing a threat of out of business. These are the grounds that you can relate to their fear.
Lack of Control
Traditional Money transfer companies are directly linked with the banking sectors and the central authorities that control the money flow. No matter where you are, if you are making a transaction with intermediaries’ help, you are liable to pay a service fee. Not only that, the central authority stores all your transaction information, which, in a sense, can be considered a privacy breach.
However, if bitcoin and Cryptocurrency enter the market, all the elements will lose control over the financial flow. This might disrupt the power they hold in the Financial world.
Devaluation of fiat currencies
If people start using the Blockchain and Cryptocurrencies for transacting money, then the fiat currency’s value will take a toll. If more and more people start using the Cryptocurrency, the value of the fiat currency will drop. If that happens, the central authority will lose all their power in the financial world.
Devaluation is the biggest threat that fiat currency might have to face after the increased regulation of the Cryptocurrency in the market.
Lack of trust
Devaluation of the fiat currency is the onset of market decapitalization. This will further deteriorate the financial standing of the fiat currency in the market. In fact, money transfer companies have foreseen this outcome. This is why they are trying their best to adapt to the whole Cryptocurrency and blockchain concept.
Just recently, PayPal, one of the biggest giants in the Financial industry, introduced a new feature that will help their users transfer Cryptocurrency. They are even planning to introduce a new network that will connect all the 26 million retail users to encourage paying shopping in Cryptocurrencies.
If the money transfer companies do not take the Cryptocurrencies transaction seriously, they might face extinction. Yes, you heard me correctly. Cryptocurrency is fairly popular with the young generation. The young generation is technological literate, so it is obvious that they will look for technological solutions for every problem they face. Hence, if there are problems in the financial industry, the young generation will not spare a second thought shifting to a new financial transaction network.