Jon Matonis (@JonMatonis) writes in Forbes about the ability to add funds to a credit card (just like what might happen when getting a refund from a merchant). Excerpts:
“[This feature] leverages a little-known type of transaction that is available on the VisaNet system called ‘Original Credit Transaction’. The other major card payment networks have a similar feature too.”
“Previously, it was cumbersome for bitcoin account holders to transact in national currencies because they had to go through one or more exchanges and then wait further for funds to arrive in a bank account or other intermediary.”
“Withdraw2Card’s] service fee is $9 plus 1.99% (for MtGox USD) with a $1,000 maximum transfer amount.”
“By removing friction from the process, bitcoin becomes easier to spend overall because not every merchant will accept bitcoin directly for payment yet and not all transactions demand irreversibility and privacy.”
As mobile penetration continues to grow exponentially, even in restrictive economies such as North Korea and Iran, underground value transfer may soon find a new vehicle – the mobile phone.
Newly emergent virtual currencies like Bitcoin have the capacity to fly beneath government regulations, opening alternate channels for subversive money transfer.
The international community may be powerless to stop the emergence of Bitcoin, particularly in contexts such as North Korea, Somalia, or Iran where there is demand for alternative monetary systems.
Bitcions will become more global once Coinapult expands their SMS Wallet capability beyond the U.S. and Canada. With that, bitcoins can be sent to any mobile phone with SMS text messaging. Compared to mobile transfer systems like M-PESA, fees for bitcoin transfers are trivially small.
Coinapult’s SMS text messaging wallet might have limited potential as a subversive tool, however. Unlike native Bitcoin transactions, Coinapult’s approach is dependent on the mobile phone network. This leaves it vulnerable to disruption by the authorities who control the network and could block messages send to or from Coinapult. Additionally, text messaging is not a secure communications protocol and there might be no method that would protect against a dishonest person who has access to the telecom operator’s systems.
The article’s accompanying infographic shows the scope of remittances including those to nations where there are restrictions.
Guardian - Remittances Around The World
The photo above accompanies a Guardian article featuring an interactive map that shows the remittance flows for the particular nation selected.
The ability to explore the map on a nation-by-nation basis (as shown above for Peru) is available only after clicking the “Leave Tour” button from the application.
Bitcoin, as a decentralized digital currency with no authorative source is beginning to gain some traction as a remittance payment method. Bitcoins are becoming fairly easy to acquire inexpensively in many areas (e.g., U.S., UK, Canada, and Europe) which correspond to areas where much of the remittance flows originate.
Since most remittance recipients use the funds for paying expenses and shopping, bitcoins aren’t (yet) quite useful to them and there are still just few methods to cash out bitcoins with a local exchanger. These methods are improving with independent exchange agents listed on LocalBitcoins.com now providing cash-out service in over 700 cities worldwide and the upcoming launch of BitcoinWireless which will let bitcoins be used to pay for mobiile phone service in more than 100 countries.
Bitcoin may have an even bigger impact for those who currently send remittances by enabling investment capital to flow quickly and cheaply to where the opportunities lie. If there is more work near a worker’s home then there is less need for that worker to live away from the family in order to provide for them. Knowledge workers are already the first to be able to work for a foreign employer without having to live abroad. And since bitcoin payments have no concept of borders, the employer can sent bitcoins to the employee at a lesser cost to both employer and employee. Increasingly these knowledge workers with foreign employers are requesting that their compensation be paid in bitcoins, and employers are increasingly willing to oblige.