Remittances and Micropayments – Stellar vs Bitcoin

Are Remittances By Stellar Really Stellar?

Stellar aims to facilitate fast, secure, and cost-effective cross-border transactions. The crypto-platform plans to form a Silk Road type link between financial institutions, payment processors, and their customers in order to make it easier to “move money”. The official Stellar.Org website states that “The Future of Banking is Here” and it will include remittances, micropayments, mobile money, mobile branches, and services to the underbanked.

Remittances, with Stellar, can be processed “for a fraction of a cent” and support for many “different currencies” is offered. One of Stellar’s partners, Tempo Money Transfers, is a remittance transfer provider that helps individuals and businesses to process remittances from Europe to almost anywhere in the world. With Stellar, Tempo can handle 600k transactions for just a penny ($0.01). Tempo has built up a network that serves 120 countries with 190,000 different locations. Using Tempo, customers can easily pay for health insurance coverage and basic utilities such as water and electricity. By partnering with Stellar, the company intends to increase transparency in the remittances industry.

Stellar Micropayments 

Oftentimes, we need to pay for the “little things” such as a $12.95 monthly payment for Express VPN. At present, if we try to make that payment with Bitcoin (BTC), then we’d have to use a third-party payments processor like Bitpay. That’s a bit inconvenient, however, once you go through the process, you will learn that Bitpay only supports a limited number of crypto wallets. So, should you happen to be using the user-friendly Waves wallet, your wallet is not currently supported.

Stellar BitPay

As you can see from the screenshot above, there is a network cost associated with using Bitpay. Of course, it’s negligible, but it begins to add up because if you choose to use the Bitcoin Core wallet, then you will have to transfer your BTC from your Waves wallet over to the Bitcoin Core wallet. For this transfer, you will have to pay a 0.001 BTC, the Waves network gateway fee, and a tiny Waves currency fee. Notably, 0.001 BTC is about the same amount as you are being charged for the VPN service itself. So now you see how highly inconvenient this is.

Stellar to the Rescue?

This, apparently, is where Stellar comes to the rescue. According to the crypto-platform’s official website, they have built a blockchain-based prototype with giant financial consulting company Deloitte that leverages the Stellar network. The prototype reportedly cuts down transaction fees by 40%. Not only that, but transaction processing time is only 5 seconds. If we compare that to BTC transactions, which can sometimes take hours and in extreme cases even weeks, then you’ll really appreciate this.

However, be aware that the Bitcoin blockchain is the most secure and trusted network in the world. Reputable crypto-platforms like Factom and Komodo use the Bitcoin blockchain to back up their data. Also, the Bitcoin protocol has never been hacked and has an established history of nearly 10 years of accurately and effectively validating transactions. Meanwhile, Stellar is still a relatively new creation.

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