Stellar for Remittances

Each year, over $500 billion of value is transferred cross-border through personal remittances. In most cases, remittances are transfers of money from foreign workers to family members in their home country, sent on a monthly basis. The typical transaction is $200 to $300 and the average retail cost of these transfers runs 7-8%, usually collected in cash. Sending costs can be as high as 15% when transferring money to people in developing economies. 

High fees to use traditional Money Transfer Operators (MTOs) are often paid by those who can afford it least – the 1.7 billion unbanked adults in the world. And those costs impact not only the sender and receiver – they also impact businesses wanting to provide speedy, affordable remittance services to these under-served demographics.

Because there are so many steps involved in using legacy financial systems and moving value through emerging market economies, costs have remained high. But technology is changing the landscape. Today, remittance service providers, digital money apps, growing fintech companies, and remote traditional banks can use Stellar to reduce the friction and costs associated with traditional MTOs, correspondent banks, and financial payment rails.

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Challenges with traditional remittances

Traditional remittances using MTOs can take days to confirm a payment and rely on local agents to pay out in cash. Settlements between agents and MTOs are not in ‘real-time’. Instead, the owed balances are settled periodically on a schedule through a commercial bank. MTOs have to keep significant capital in destination countries to fund days’ worth of transactions and repay agents. Some digital banks and wallets may be able to settle more stable currencies such as USD and EUR in ‘real-time’ but are rarely able to move money to or from emerging economies.

With legacy systems, new entrants and growing fintech companies must establish in-country accounts and local bank relationships for every geography they wish to serve. Correspondent banks charge fees and make profit on the foreign exchange (FX) across currencies, which increases operating costs. To cover these additional costs, remittance service providers charge fees or build costs into the FX transaction thereby  passing the cost along to their customers. The end result is that remittance recipients receive less money.

The traditional remittance pathway

In short, it’s hard to enter new markets or expand remittance services to people who need them most, as intermediaries cause slow settlement times and create additional operating costs.

How Stellar helps

Stellar records the movement of secure, digital representations of world currencies, helping businesses facilitate cross-border transactions without intermediaries like correspondent banks, but rather through two efficient payment standards

Businesses using Stellar can connect directly to a network of fully licensed fiat (traditional currency) acceptance and distribution partners called anchors

  • Anchors are licensed and regulated financial institutions, money service businesses, or fintech companies that provide fiat on/off ramps to the anchor country’s banking system.
  • Anchors often also provide ‘stablecoins’, one-to-one fiat-backed tokens, that users can redeem for fiat at any time.
  • Anchors handle local regulatory processes such as KYC/AML.

Anchors take care of deposits, redemptions, and compliance, so businesses building on Stellar can focus on their customers’ experience. The typical Stellar-powered remittance experience is simple:

The anchor pathway
  1. A sender funds the transaction in their country.
  2. The funds are received by an anchor and represented on Stellar in the form of fiat tokens. 
  3. Fiat tokens are converted over the Stellar network into the recipient’s currency via a path payment operation, using either the exchange rates on the Stellar Decentralized Exchange (DEX) or facilitated through a market maker.
  4. Funds arrive in the destination country. They can be transmitted to either the end-recipient’s wallet, bank account, or another local rail.

What the user sees

  • Laura chooses to deposit USD
  • Enters her KYC info
  • Receives deposit instructions
  • Transfers funds via ACH
  • Receives USD tokens in her wallet
  • Laura enters Victor’s wallet address
  • Chooses to send USD
  • And for Victor to receive BRL
  • Confirms the payment
  • Victor receives the payment in his wallet a few seconds later
  • Victor selects the amount of BRL he’d like to withdraw
  • Enters his KYC info
  • Enters his bank account info
  • Confirms the withdrawal
  • Receives BRL in his bank account via TED

Anchors and the businesses they support leverage Stellar’s efficiency to provide new, cost-effective financial services and cut intermediaries out of the settlement process. There’s a growing list of anchors around the world. Here are just a few:


Arf is a global settlement banking platform, eliminating the capital-intensive business model of the cross-border payments industry by offering digital asset-based working capital and settlement services with native on-ramp and off-ramp capabilities to licensed money service businesses and financial institutions. Arf serves as a regulated strategic partner for e-wallets, neobanks, FX providers, digital remittance companies, and payment companies.


Settle Network is a digital assets settlement network operating across Latin America, based in Argentina. They are anchors for the Argentinian peso, Brazilian Real, and Mexican Peso. Settle leverages this infrastructure to support both exchange-related transactions as well as cross-border payments.


Based in Paris, Tempo is a Money Transfer Operator, and primary Euro anchor operating on Stellar. Since 2017, Tempo’s EURT token has been used to facilitate cost effective money transfers both into and out of the Eurozone. Tempo serves EU customers who remit money to their families in the developing world, and is increasingly supporting B2B payments via EURT as well.


Finclusive, the network’s newest USD anchor, is building two promising solutions for the Stellar ecosystem. First, Finclusive acts as a seamless on/off-ramp for existing USD digital asset issuers such as AnchorUSD. Combined with Finclusive’s compliance expertise, they enable compliance-centered banking for the billions of people that are underserved by today’s banking system. Finclusive also offers their Compliance-as-a-Service platform to all anchors on the Stellar network to help them onboard customers faster, safer, and cheaper.

Benefits of the Stellar Network

Whether your company becomes an anchor, or uses an existing one, you’ll still enjoy all the benefits of the Stellar network.

Transactions on Stellar are confirmed in 3-5 seconds.

No pre-funding requirement
Real-time transactions in digital currencies minimize working capital requirements.

Currency support
Transact in USD, EUR, NGN, MXN,  BRL, ARS, and more … or create new digital currencies for your specific needs by becoming an anchor.

Built-in features allow unified KYC/AML via partners and travel rule compliance.

Developer Tools
Stellar’s open-source developer resources provide comprehensive documentation, SDKs, and tutorials.

Global Scale
Stellar is a global network that can expand your company’s reach to new geographies and users.

Start using Stellar for remittances

Stellar’s expanding network of anchors, applications, and partner companies is changing how people send money across borders. Whether reducing the cost of remittances going to the developing world or enabling companies to expand to new geographies, Stellar creates frictionless access to the global financial system and improves access for the world’s unbanked. 

Curious how the Stellar network could help you move value across borders and grow your business? We’d love to talk. Contact us now to get started.