Blockchain technology is rapidly transforming industries, and one area where it’s making a huge impact is the remittance sector. Traditional money transfer services often come with high fees, slow processing times, and a reliance on intermediaries, which can be frustrating for users. Platforms like SendFriend are using blockchain to offer a more efficient solution—lower fees, faster transactions, and greater transparency. In fact, global remittances were valued at over $700 billion in 2023, showcasing the immense potential for innovation in this space.
To put it into perspective, MoneyGram, a well-established player in the remittance industry, earned around $1.5 billion in revenue in 2022 with both digital and in-person transfer options. This just goes to show how rapidly the demand for remittance platforms is growing!
If you’re thinking about creating your blockchain remittance platform, you’re in the right place! This blog will walk you through the essential steps in developing such a platform—from understanding the core technology to ensuring security and scalability. Let’s begin!
Overview of the SendFriend Platform
SendFriend, now rebranded as Diameter Pay, is a global platform that makes cross-border payments easier for banks and financial institutions. It was founded in 2017 at the Massachusetts Institute of Technology with the goal of improving financial inclusion using blockchain technology. Originally focused on helping consumers, the platform has evolved into a B2B solution that allows financial institutions, especially in emerging markets, to connect to the global economic system and offer efficient payment services.
Key Features
- Instant Payments: Thanks to blockchain technology, SendFriend enables real-time transactions, so money can be sent and received almost instantly.
- Low Fees: SendFriend keeps transaction costs low, making it more affordable for users to send money internationally without worrying about expensive fees.
- Great Exchange Rates: SendFriend offers competitive exchange rates, ensuring users get the best value when converting currencies for international payments.
Key Market Takeaways for Blockchain Remittance Platforms
According to VerifiedMarketResearch, the Digital Money Transfer and Remittances Market is growing quickly, with a value of USD 325.19 billion in 2024 and expected to reach USD 588.66 billion by 2031. This growth is driven by the increasing use of blockchain technology, which provides enhanced security, transparency, and efficiency for cross-border transactions.
Source: VerifiedMarketResearch
As people look for faster and cheaper ways to send money internationally, blockchain-based platforms are becoming more popular as an alternative to traditional methods.
One of the main reasons blockchain remittance platforms are gaining traction is their ability to cut down on transaction fees and processing times. By enabling peer-to-peer transactions without intermediaries, blockchain helps reduce costs significantly. Additionally, as the number of unbanked individuals continues to rise globally, blockchain offers a way to send and receive money without relying on traditional banking systems, making financial services more accessible to everyone.
Prominent platforms like Ripple and Stellar are leading the way in blockchain remittances. Ripple helps financial institutions make fast, low-cost cross-border payments, while Stellar connects banks and payment systems to facilitate smooth currency transfers, especially for the unbanked. Stellar’s partnership with IBM to create the World Wire platform is just one example of how these collaborations are expanding the reach of blockchain remittance services, offering faster, more affordable global payments.
A Perfect Time to Invest in Blockchain Remittance Platform Development
Launching a blockchain-based remittance platform like SendFriend is a smart move right now. Traditional money transfer services can be slow and expensive, but blockchain technology offers a solution. By cutting out intermediaries, these platforms can offer cheaper and faster transactions.
Companies like Remitly, which earned around $500 million in 2022, have already proven the demand for digital remittances, especially among immigrants looking for quick and affordable ways to send money home.
Blockchain platforms also bring added benefits like security and transparency. With transactions being decentralized and recorded on the blockchain, there’s less room for fraud, giving users peace of mind. This level of trust can make a huge difference, especially when competing with traditional financial systems.
For example, Revolut, which made about $620 million in 2022, offers remittances with competitive exchange rates and no hidden fees, showing how much consumers appreciate these features.
The market for remittances is huge and growing, especially in regions where traditional banking services are limited. By tapping into this space with blockchain technology, you’re not just offering a better service — you’re stepping into a thriving industry with plenty of room for innovation and growth.
Did you know that…
In 2023, remittances surpassed a staggering $669 billion, becoming a lifeline for many emerging market economies. One company making waves in this space is LemFi. Since launching in 2020, this London-based fintech has already helped over 1 million active users from diaspora communities send money to countries like Nigeria, India, and Pakistan. Recently, LemFi raised $53 million to expand its services into Asia and Europe, partnering with Modulr to make that happen.
With platforms like these leading the way, now is a great time to make your mark in the remittance world.
Business Model of the SendFriend Platform
SendFriend’s business model is centered around blockchain-powered remittances. By utilizing blockchain, the platform enables faster transactions—often processing payments in just seconds instead of the usual 3-5 days required by traditional services.
- It also helps reduce fees significantly. For example, SendFriend charges just 2.5% per transaction, compared to the industry average of over 7%. This allows users to save a lot on transaction costs, contributing to the $45 billion in annual savings in the global remittance market.
- To boost its efficiency, SendFriend has partnered with Ripple and uses its XRapid service, which facilitates real-time transfers by converting USD to XRP and then to Philippine Pesos.
This avoids the delays and costs of traditional banking systems and ensures quicker, more affordable transactions.
Financial Performance and Funding
As of now, SendFriend has raised $1.82 million, with its most recent funding round in February 2019 securing $1.7 million from investors like MIT Media Lab and Barclays. Currently, in the seed stage, SendFriend is looking for more capital to continue expanding its operations and technology.
In 2023, the company made a strategic move by acquiring DigiPli, a compliance provider, to strengthen its AML and regulatory capabilities. This acquisition is a step toward becoming a fully regulated entity, which will improve trust with banks and other financial institutions.
Market Position and Future Plans
Based in New Jersey, SendFriend is focused on serving the large Filipino community in the U.S., which sends around $10 billion annually to the Philippines. SendFriend plans to expand across more U.S. states and grow its revenue through transaction fees, APIs, and white-label solutions.
Looking ahead, capturing just 1% of the U.S. to Philippines remittance market could generate around $400 million in transactions. As SendFriend scales its operations, maintaining strong compliance and regulatory standards will be key to its continued success.
Development Steps for a Blockchain Remittance Platform like SendFriend
Creating a blockchain-based remittance platform involves multiple steps to ensure efficiency, scalability, and security. Below are the essential developmental steps for such a platform:
1. Define Business Objectives and Target Audience
Identify the core purpose of the platform and the specific audience it will serve. For example, SendFriend targets overseas workers who frequently send money to their families. A clear understanding of the business model ensures the platform addresses user needs effectively.
2. Choose the Right Blockchain Technology
Select a blockchain framework that aligns with the platform’s requirements. Options like Ripple, Stellar, or Ethereum can provide the infrastructure needed for real-time, low-cost transactions. The choice should focus on scalability, transaction speed, and security.
3. Establish Partnerships with Financial Institutions
Collaborate with banks, digital asset exchanges, and financial institutions to facilitate seamless currency exchanges and withdrawals. Partnerships ensure compliance with local financial regulations and expand the platform’s global reach.
4. Design a User-Friendly Interface
Develop a simple and intuitive interface for both web and mobile applications. The design should prioritize ease of use, especially for non-tech-savvy users. Features such as real-time exchange rates and transaction tracking enhance the user experience.
5. Implement Secure KYC and AML Procedures
Incorporate Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols to verify user identities and ensure compliance with global regulations. These procedures enhance platform security and build user trust.
6. Build a Secure Payment Gateway
Integrate a robust payment gateway that allows users to transfer funds securely. This gateway should support multiple payment options, including bank transfers, credit cards, and digital wallets.
7. Optimize Transaction Costs and Speed
Use blockchain’s decentralized nature to minimize transaction fees and processing time. Implement smart contracts to automate processes such as currency conversion and fund transfers, ensuring efficiency and cost savings.
8. Ensure Regulatory Compliance
Adhere to local and international regulations governing money transfers and cryptocurrencies. Compliance with standards like GDPR and PCI DSS ensures data privacy and secure handling of financial information.
9. Test and Launch the Platform
Conduct rigorous testing to identify and resolve potential issues. Security audits, load testing, and user feedback are essential before launching the platform. Once ready, introduce the platform to the market, accompanied by promotional strategies to attract early adopters.
Cost of Developing a Blockchain Remittance Platform like SendFriend
Stage | Task | Description | Adjusted Cost Range |
1. Research & Feasibility Study | $1,000 – $5,000 | ||
– Market Research | Analyze competitors, target audience, and industry trends. | $500 – $2,000 | |
– Technical Feasibility | Evaluate blockchain options, scalability, and integrations. | $300 – $2,000 | |
– Regulatory Analysis | Understand legal and compliance requirements. | $200 – $1,000 | |
2. Blockchain Development | $5,000 – $25,000 | ||
– Smart Contracts | Develop core functionalities (e.g., transaction processing, compliance checks). | $2,000 – $10,000 | |
– Blockchain Integration | Connect to a chosen blockchain network (e.g., Ethereum, Solana). | $2,000 – $8,000 | |
– Consensus Mechanism | Implement a suitable consensus algorithm. | $1,000 – $7,000 | |
3. Frontend Development | $3,000 – $15,000 | ||
– User Interface (UI) Design | Create intuitive and user-friendly interfaces. | $1,000 – $4,000 | |
– User Experience (UX) Design | Ensure a seamless user journey. | $1,000 – $3,000 | |
– Frontend Development | Build interactive web and mobile applications. | $1,000 – $8,000 | |
4. Backend Development | $4,000 – $20,000 | ||
– API Development | Create APIs for seamless integrations. | $1,000 – $6,000 | |
– Database Design | Design databases for user data, transaction history, etc. | $1,000 – $5,000 | |
– Backend Logic | Develop core platform functionalities. | $2,000 – $9,000 | |
5. App Features | $2,000 – $10,000 | ||
– Multi-currency Support | Enable transactions in various fiat and cryptocurrencies. | $1,000 – $4,000 | |
– Cross-border Payments | Facilitate fast and cost-effective international money transfers. | $500 – $3,000 | |
– Wallet Integration | Integrate with digital wallets. | $500 – $3,000 | |
– Other Features | Loyalty programs, rewards, or custom additions. | $500 – $2,000 | |
6. Testing & Quality Assurance | $2,000 – $8,000 | ||
– Unit Testing | Test individual components. | $500 – $2,000 | |
– Integration Testing | Test the interaction between components. | $500 – $3,000 | |
– User Acceptance Testing (UAT) | Test with real users for feedback. | $1,000 – $3,000 | |
– Security Audits | Conduct penetration testing and vulnerability assessments. | $500 – $2,000 | |
7. Deployment & Maintenance | $1,000 – $7,000 | ||
– Deployment | Deploy to a secure and scalable infrastructure. | $500 – $3,000 | |
– Ongoing Maintenance | Regular updates, bug fixes, and security patches. | $500 – $4,000 |
Total Estimated Cost Range: $10,000 – $100,000
Variable Factors Affecting the Development Cost of Blockchain Remittance Platform
Several factors can significantly impact the development cost of a blockchain remittance platform. These include:
- Blockchain Platform Selection: Choosing a platform like Ethereum, Solana, or Polygon will have varying costs due to transaction fees, development complexity, and scalability.
- Smart Contract Complexity: The sophistication of smart contracts for handling transactions, compliance checks, and dispute resolution directly influences development time and cost.
- Integration with Existing Systems: Integrating with existing payment gateways, banking systems, and regulatory frameworks can add complexity and cost.
- Regulatory Compliance: Meeting KYC/AML, data privacy, and other regulatory requirements in different jurisdictions can be costly and time-consuming.
Conclusion
Blockchain remittance platforms like SendFriend offer great benefits to both individuals and businesses. For individuals, these platforms help lower remittance fees, speed up transactions, and promote financial inclusion by making affordable money transfers accessible to more people. On the business side, companies can create similar platforms to earn revenue through transaction fees, currency exchange services, and premium features. At the same time, they help build a more inclusive and efficient global financial system.
Looking to Develop a Blockchain Remittance Platform like SendFriend?
At Idea Usher, with over 500,000 hours of coding experience, we’re here to help you build a secure and reliable blockchain-based remittance platform. Our expertise in blockchain technology allows us to create innovative solutions that make cross-border transactions faster, cheaper, and more inclusive. Get in touch with us today to discuss your project and discover how we can help you transform the way people send money globally.
FAQs
Q1: How to develop a blockchain remittance platform?
A1: To develop a blockchain remittance platform, you need to choose the right blockchain technology, ensuring it supports secure, fast, and low-cost transactions. Design an intuitive user interface that simplifies the process for users. Implement essential features like real-time tracking, multi-currency support, and compliance with regulations. Focus on security to protect user data and transactions and make sure the platform is scalable to accommodate growth.
Q2: What are the features of a blockchain remittance platform?
A2: Blockchain remittance platforms typically offer fast and low-cost cross-border payments, transparent transaction records, and robust security features. They support multi-currency exchanges, real-time tracking of transfers, and seamless integration with traditional financial systems. Additionally, platforms include features like user-friendly mobile apps, customer support, and anti-fraud measures to ensure a reliable and secure experience.
Q3: What is the cost of developing a blockchain remittance platform?
A3: The cost of developing a blockchain remittance platform can vary based on factors like the complexity of features, the blockchain technology used, and the scope of the project. It involves expenses for development, security, design, compliance, and testing. Ongoing costs for platform maintenance and updates must also be considered, along with the investment needed for integration with financial institutions and third-party services.
Q4: How do remittance platforms make money?
A4: Remittance platforms typically earn revenue by charging transaction fees, either as a fixed amount or a percentage of the transaction. Some platforms also generate income through currency conversion fees or by offering premium services like faster transfers or higher limits. Additionally, they may form partnerships with financial institutions and charge for value-added services such as bill payments or other financial tools.