Interview

How can remittance providers and others in the payment chain embark on a crypto journey?

Friday 27 May 2022 08:37 CET | Editor: Claudia Pincovski | Interview

With crypto’s potential to improve payments, especially cross-border, Marcus Bjorklund from Swedish cryptocurrency broker Safello shares advice on how remittance providers and others in the payment chain can embark on a crypto journey.

Marcus, thank you for accepting an interview with us. Could you please tell us what is Safello?

Safello was founded in 2013 and is a Swedish cryptocurrency brokerage for Swedish-based customers. The name Safello comes from Safe and Fellow and it represents our motto that you can invest in cryptocurrencies in a safe and secure way. Safello is offering a solution for institutions, retail, and business customers to buy, sell, deposit, withdraw, and store crypto assets in our own wallet which we launched in 2021. All our customers are able to identify themselves with a digital ID verification tool from Sweden. We are offering several payment options for our customers to buy their crypto assets, such as instant mobile payments, a vendor payment system, and SEPA payments. We are enabling our customers to interact with us in KYC processes through an Open Banking provider to provide a service that is as digital and smooth as possible.


What role will blockchain technology and cryptocurrencies play in the development of cross-border payments? And how will this benefit the global diaspora and their loved ones back home?

With almost 600 billion USD in remittances to low- and middle-income countries in 2021 the cross-border payments and the remittances industry remains a lifeline for millions of people globally. Everyday millions of people are dependent on their family and friends sending money back home for daily basic needs such as food, hospital bills, and their children’s education, which intensified further during COVID 19.

I believe that blockchain technology and cryptocurrencies will play a big role in the future for cross-border payments. The main important benefits that the diaspora community will see are reduced fees together with transparency and privacy concerns. The lower fees will have a significant impact on how much money is actually getting into the pocket of the receiver, every percentage of reduced fees can be life-changing for many people. The customers will have a much more transparent environment with cryptocurrencies since everything is going to be on a public blockchain and each step and status of a transaction will be available for both parties to see. With the use of a blockchain, cross-border payments won’t need as many intermediaries meaning that the customer information will not be shared as it is today which means better privacy as well.


With crypto providing so many benefits for the remittance corridor, how can remittance providers and others in the payment chain embark on a crypto journey?

I think that the remittance providers who start their crypto journey first will be the most successful ones in the future. Many of the traditional providers might use the argument that the industry is still very cash-intensive and therefore cryptocurrencies are not a good option for that reason. But the benefits with crypto are not only how senders are paying or receivers cash out or get the money. There are many benefits to the technology and for the remittance providers one of the most significant benefits is instant, or in seconds, settlements. This would completely change how the market is working today with pre-funding correspondent banking partners.


What are the risks of offering crypto payments, and what are the risks of not doing it?

Cryptocurrencies like any technology have their own inherent risks like volatility, no central authority ensuring that transactions comply with laws and regulations and that transactions are anonymous or pseudo-anonymous meaning that they can attract criminals to be used for money laundering and terrorist financing purposes and last that most of the transactions today are irreversible. By not offering or using the cryptocurrencies or the blockchain technology to its customers I believe that those companies will lose their competitive advantages since other companies will be able to operate in a completely different and more effective way which would enable them to offer much better, faster, and cheaper services to their customers.


How can some of those risks be overcome? With what results?

Even if the technology has inherent risks as described above, a company can implement many mitigating factors to lower these risks. For example, companies can use stablecoins to ensure that the transfer of value of a transaction is secured. They should implement KYC processes and transaction monitoring to ensure that money laundering and terrorist financing risks are mitigated, and we see that more laws and regulations are coming in the near future which will also make it safer for customers to use since companies must be compliant with these laws. Developments in blockchain technology will also be able to solve the irreversible transaction issue so that customers feel safer when using cryptocurrencies.


What advice would you give merchants, acquirers, and others in the payment chain that wants to offer crypto payments?

Start to investigate as soon as they can how it can be implemented in their business model today. Companies that do that will have competitive advantages in the future due to the benefits the technology offers. Even if this is associated with high costs today it will prepare the companies for what is about to come in the future, and it will be easier to implement once it is more accepted by the diaspora community.

Marcus will be one of the speakers at RiskConnect Insights, an event that features three in-depth presentations on cryptocurrency, crime, and compliance, followed by a lively panel discussion.


About Marcus Bjorklund

Being a Head of Financial Crime Prevention at the leading Swedish cryptocurrency broker Safello in Sweden, Marcus interacts with and enhances industry efforts to clarify and enhance regulatory and legislative development within Blockchain finance. During his years in the money remittance industry, he was a driving force in Sweden to demystify the industry to public and private stakeholders. Having an extensive experience in the remittance industry brings a unique insight into both of those industries that could learn from each other. A unique combo that has not been explored by many. Until today.


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Keywords: remittance, payments , crypto, cryptocurrency, retail, crypto asset, e-wallet, digital identity, identity verification, SEPA
Categories: DeFi & Crypto & Web3
Companies: Safello
Countries: World
This article is part of category

DeFi & Crypto & Web3

Safello

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