Blockchain helping Veem simplify international money transfers
Marwan Forzely wants international wire and bank transfers to be as simple as buying a latte at Starbucks, and as the cofounder and CEO of Veem, he’s working toward that goal every day.
However you pay for your morning cup, you don’t think too hard about it or all of the little processes going on behind the scene to move the six bucks from your account to Starbucks’.
That’s definitely not the case when sending money to a business in another country. You need the receiver’s information and then you have to complete forms. Throw in the wire fees and cut off times.
And we haven’t even talked about the receiving end. There’s the wait for the funds to arrive before you send the product. Then you check the account and reconcile it to make sure everything balances.
“In 2017, you can track the shipping status of a Fedex package and even a pizza, but when you move money, you can’t track it until the receiver says they have it,” Mr. Forzley said.
The more banks that are involved in a transfer, the more expensive it becomes as each takes their cut, Mr. Forzley said. The solution is the blockchain, which is a simpler, more efficient process.
To participate in the blockchain, each party (or “node”) connects their computers to the network, using a client to both validate and relay transactions. Everyone gets a copy containing relevant transaction information. Nodes participating in a transaction see their functions completed almost in real time. Fees are cut in half and forex rates are two per cent at most.
Veem’s efficiency is further assisted by multi-rail technology that serves a purpose similar to what Expedia or Mapquest does when we travel, Mr. Forzley said. Perhaps a sender needs to move the money by a certain date or they are waiting for a shipment as per a contract. Veem selects the best method to convert that currency so the transaction can be completed with optimal efficiency.
“Those bank fees are based on a technology designed in a different era of commerce that was heavily domestic,” Mr. Forzley explained. “Now the economy is more global, with buyers and suppliers often not in the same country.
“As business becomes increasingly global, removing friction becomes more and more important.”