New entrants disrupting the traditional business model of the global remittances industry through blockchain technology

Abstract

The world is becoming increasingly digital, and technologies are emerging and evolving. Some of these technologies are considered to have disruptive potential, which is why it's important for industries and companies to keep up with the ongoing changes. One technology that is currently considered disruptive is called "blockchain." However, it is believed that it is not just an occasional disruption, but will potentially stay for the long term and has great potential for it to be implemented and adopted in most industries. Nevertheless, blockchain is a relatively new technology that is still immature and uncertain, and it is not yet clear how it will evolve and impact these different industries. Therefore, the objective of this study is to analyze how new entrants are using blockchain technology in the global remittance industry to disrupt the traditional business model and transform it into a much more efficient process that, in particular, reduces costs for all stakeholders, but especially for the end user. These end users are mostly part of the world's unbanked population and rely on remittances to meet their daily expenses. The study was conducted in collaboration with three companies: Bitso, GreenHouse Capital, and Spin by OXXO, based on a business model innovation framework and two related theories: innovation diffusion theory and disruptive innovation theory. Since blockchain is a relatively new technology and topic, there is little information about it in the previous literature, so a qualitative study with interviews was conducted to gather information for the study. Some of the findings suggest that regulation is one of the biggest challenges to driving mass adoption. In addition, blockchain allows for the elimination of intermediaries in the process, which helps to significantly reduce costs. The complexity of the technology also plays an important role and will be critical to the end user's decision to use it. Blockchain is being developed and tested day by day and is therefore a very interesting topic for future research.