Veem Money Transfer Service
October 10, 2018
Veem, a San Francisco-based money transfer service promises to simplify international wire transfers.
Designed as a platform to allow businesses to transfer money, Veem is the first platform to use blockchain technology to process transactions.
Technology aside, what makes Veem attractive is the speed and low fees compared to traditional bank wire transfers. According to Veem, a typical international transfer is processed in 1-3 days.
As I wrote in a previous post, sending money to individuals or business entities outside the U.S. is a hassle. Unlike TransferWise, Veem is only for business-to-business transactions. Veem charges no fees to the sender of funds unless you send a transfer to a recipient within the U.S. Domestic payments cost $1 per transfer.
How a Transfer Takes Place
When a customer initiates a transfer, Veem first transfers dollars to Bitcoin and then from Bitcoin to the currency of the destination country.
According to Veem’s website, “payments are made using cutting-edge blockchain technology, meaning lower fees because there are no intermediary banks involved along the route of the transfer. Intermediary banks slow down transactions and take a small fee for themselves. No transactions take place using SWIFT.”
However according to an CNBC article from February 18, 2018, “Veem uses three methods of sending money, Treasure, SWIFT and blockchain.”
The CNBC article says, “When a customer uses Veem’s site to make a payment, Veem’s software decides which transfer method to use — the customer never knows if it’s going via blockchain or another method.”
Kind of confusing to say the least. I believe the author of the CNBC article made an error in confusing the subscription model with the API.
The documentation within the developer API section of the Veem website, does mention, payments are sent via blockchain, treasury or third party payment processors. However, Veem clearly states on its website, no transactions use SWIFT. I am assuming this does not apply to payments made via the API.
Cost of Transfers
You can send up to 20 international transfers per month for $0 under the Basic plan. The Basic plan is probably more than enough for most smaller sized companies.
Veem also offers monthly subscriptions for companies that need to send more than 20 international payments.
The Prime plan includes up to 100 domestic transfers per month for only $19/mo.
Need unlimited transfers? The Platinum plan at $39/mo includes unlimited international payments. Note the Platinum plan increases to $199/mo after 3 months.
If the recipient of your international transfer would like to receive payments in USD, there is a flat rate receiving fee of $20/transfer.
It’s not clear how the conversion spread works if the recipient requests USD. I am assuming the conversion spread is applied and the recipient than receives payment in USD, minus a $20 transfer fee.
Exchange rates for the person receiving the transfer are based on the total amount of the transfer. For example, a transfer of up to $4,999 will incur a currency conversion spread of 1.9%. Rates drop as low as 1.5% for transfers greater than $25K.
Tracking a Transfer
Unlike TransferWise, Veem allows the recipient of funds to track the transfer.
Real-time tracking shows proof of transaction allowing the sender to know when the funds have been deposited in the receivers’ account. Transfers are typically completed in 1-3 business days.
If you’re a developer, Veem has a RESTful Multi-Rail API for international payments. The API supports 3 payment methods including;
- Disbursement to send payments to multiple payees
- Marketplace to send payments to suppliers
- Pay Me used to request payment from other businesses for goods or services
Multi-Rail refers to the routes a transfer can take on the way to its destination. Unlike the subscription model, payments made via the API are routed via blockchain, treasury or third party processors.
The route a transfer takes depends on demand at the time of the transfer requested. Transfers during periods of low demand may have a large bid-ask spread, making treasury or third-party processors a more attractive option.
Veem can be used to send to and from 25, mostly European countries. You can send payments to a list of about 71 different countries. Here’s the full list of the 96 countries in which Veem is available.