There are about 250 million immigrants in the world sending over $600bn to support their friends and families back home every year. The remittance market is a significant source of funding for many individuals and families across the world.

 

Immigrants face some challenges when executing cross-border and local money transfers; especially, the cost of remittances is punitively high. Transferring money via banks and traditional international money transfers operators could cost from 7–12% of the value transferred. Over the past decade, new digital remittance companies have succeeded in reducing this cost, but the cheapest service could cost up to 4%. Their access-points or withdrawal channels can also be difficult to interact with, especially by the unbanked population.

Although centralized remittances like Western Union, MoneyGram and a few others tried to solve these problems, they still incur high transaction fees (6%-10%) for low amounts ($100 — $300). These centralized giants manage to build a huge retail network across the world (more than 1 million retail) so competing with them without forming strong alliances is impossible and the wealth will be within their small pool.

 

Blockchain is the way to decentralization

The blockchain and crypto coins solved the problem of borderless assets transfer because they overcome the most important factor in money transfer operations which is the trust.

Blockchain payments are trustless as they are guaranteed by the network cryptographic and doesn’t require a third party.

 

Based on the trustless factor and with the help of smart contracts we can achieve a decentralized network of remittances whose parties don’t need to know each other or require a third party to guarantee the money transfers.

A decentralized network of P2P remittances is the only network that would be capable of competing with big players like Western Union because such a network would grow rapidly due to the P2P characteristics:

• P2P remittance can start with only 1 branch and will be connected immediately to other millions of peers across the worlds.
• With the help of Apps, the cost of running such a remittance would be too low because the cost of having servers, software, data security, marketing and others will be offloaded to the blockchain and the self-network-discovery.
• Access to a huge liquidity pool will be formed from all peers and will be available for everyone.
• Being able to run a remittance, just by running a web or mobile app will help spreading the network as anyone (individual or retailer) can use a P2P remittance app to operate a remittance from a small shop or a post office as a side business.

As there is a real use case of P2P remittance and huge value for end users and operators, then the remaining question will be how can we achieve such P2P network?

 

Air Transfer Protocol

Air Transfer Protocol (ATP) is the first decentralized P2P open protocol designed with the power of the blockchain by defining the standards for creating a decentralized network of entities (retails or individuals) that would like to operate cost-less remittance business to facilitate the transfer and conversion of coin-cash-coin (cash to coin, coin to cash and cash to cash) using only stable coins to avoid crypto volatility and reserve the transaction amount and staked tokens values.

In the previous flow; a sender goes to a sender median (SM) to hand-out the cash, then sender median sends tokens to a suitable receiver median that commits to deliver the cash. ATP Smart Contracts (ATPSC) holds the sent tokens till the Receiver Median (RM) delivers the cash to the receiver. Once the receiver confirms receiving the cash, the ATPSC releases the transferred tokens to the receiver median after deducting any fees included for the involved parties.

KYC & Regulations

Any business in payment space is always subject to different supervision and regulations such as Know Your Customer (KYC) and Anti-Money Laundering (AML). However, such regulations differ from place to another and it’s left to the different apps that will build on top of the Air Transfer Protocol to organise and cover such organise where they operate.

Conclusion

Systems that we thought they’re untouchable and out of competency due to the lake of resources and huge initial investments; are now being challenged by the rise of the decentralized era powered by the blockchain technologies; a decentralized remittance market is now achievable through a multi-million P2P retailers network across the globe.

Air Transfer Protocol (ATP) is the infrastructure for such a network that will fuel different apps building on top of it where the benefits will be for end users in the form of low transaction fees and flexibility to send money from any nearby store or directly from a mobile app while remittance operators will share the profit of multi-billion dollars, instead of being centralized and restricted to a small number old-big players.

For details about the technical details and the integration with the Air Transfer Protocol, refer to Air Transfer Protocol website or jump directly to the white paper here.

This is Ahmad Elsokkary, founder of Air Transfer and I’d love to hear your thoughts! Please, stay tuned for more to come about ATP and ATS.