Global enterprise payment services provider Mercury FX international, on Wednesday, the 31st of March, announced that it had – together with blockchain-based payment technology provider, Ripple – have begun piloting instant remittance technology in South Africa. The firm also confirmed that it had been inducted into the Southern African nation’s IFWG Regulatory Sandbox.
The firm first piloted the technology back in 2018, moving money to Mexico, as well as the Philippines. South Africa is only the latest nation to play host to Mercury’s remittances experiment. Mercury, which is an established e-money payments institution – with offices in the United Kingdom, Hong Kong, and South Africa – will be partnering with Ripple, as well as local (Bittrex backed) cryptocurrency exchange, VALR, with the intention of helping remittances in, and out, of the nation flow more seamlessly.
“Mercury is testing the regulatory treatment, and associated regulatory reporting implications and obligations, of crypto assets (specifically XRP) being used for affecting low-value, cross-border remittances between South Africa and the United Kingdom and vice versa, subject to certain limits prescribed by the relevant authorities. Testing will in the main be done in terms of the South African Exchange Control Regulations 1961, promulgated in terms of section 9 of the Currency and Exchanges Act, 1933 (Act No. 9 of 1933).” – Mercury FX International.
The firm reaffirmed its commitment to being at the forefront of global payments technology, and continuing its mission of making the movement of funds – from one global location, to another – quicker, more cost effective, and executable at any hour of the day. As things currently stand, the cost of international remittances is more burdensome on the people who the services the most (usually members of the global expatriate workforce, sending money home.)
While statistics website, Statista expects world remittance values to grow to US$106,925m in 2021, the World Bank projected a decline in overall remittance volumes – on the back of the Covid-19 pandemic induced global financial crisis. Funds sent home by migrant workers, to low, to middle-income countries being the hardest hit, with numbers predicted to fall as much as 7.5% in 2021.
“The impact of COVID-19 is pervasive when viewed through a migration lens as it affects migrants and their families who rely on remittances,” stated Mamta Murthi, Human Development Vice President, and Migration Steering Group Chair, at the World Bank.
One can only imagine how a savings in the cost of remittance, as well as a reduction in the time it takes to send funds home, would have on the lives of low income families who rely on remittances from migrant laborers.
Under the South African government’s IFWG guidelines, accepted market players get to test their product, or service, in a supervised environment – overseen by relevant regulatory bodies within the country. The purpose of the regulatory Sandbox, according to the official website, is to allow for responsible financial innovation while altering laws to accommodate such an outcome.
As part of the IWFG Regulatory Sandbox’s First Cohort, Mercury FX, Ripple, and VALR join local digital asset services provider, Centbee, cross-border remittances provider, Xago Technologies, & local Banking institutions Standard Bank, and Investec Bank. Time has yet to tell on what regulatory regimes the nation will come up with, regarding cryptocurrencies, but the Sandbox indicates a willingness – by the nation – to embrace digital currencies.