Micropayment Systems for Migrant Workers: An Economic Proposal Bridging the U.S. and Central and South America

Micropayment Systems for Migrant Workers: An Economic Proposal Bridging the U.S. and Central and South America

Dr Craig S Wright

GEOG620: Economic Geography (B01)

College of Arts and Sciences

Liberty University

Summer 2023


This paper proposes implementing a micropayment system to facilitate remittances for migrant workers moving from Central and South America to the United States. Traditional remittance methods often involve high transaction fees that significantly decrease the value of money sent to families in workers’ home countries. The proposed system addresses this inefficiency and fosters a more equitable economic landscape.

Through this paper, we examine the physical and human geographical features of the regions involved and analyze the current political climate that shapes financial regulations and policies impacting remittances. Grounded in Kenneth Arrow’s concept of resource allocation and various economic geography terms, such as spatial interaction, agglomeration, and economic diversification, this proposal aims to reduce spatial inequality, stimulate regional economic integration, and serve vulnerable populations, thus reflecting the love of Christ.

The micropayment system is not only an economic innovation but also a service-oriented initiative that champions fairness and justice, promoting the welfare of migrant workers. The paper outlines a comprehensive mechanism for promoting the proposed system to relevant officials and stakeholders, incorporating policy papers, stakeholder engagement, public advocacy, and legislative proposals. By weaving together the threads of economics, geography, politics, and Christian principles, the study uniquely contributes to the discourse on financial systems for migrant remittances.

Keywords: Micropayments, Migrant Workers, Remittances, Economic Geography, Central and South America, United States, Resource Allocation, Spatial Inequality, Regional Economic Integration, Financial Regulations, Agglomeration, Economic Diversification, Spatial Interaction, Human Capital, Vulnerable Populations, Financial Systems.


Abstract 2

Introduction. 5

Literature Review.. 9

Spatial Interaction. 10

Economic Landscape. 12

Location Theory. 13

Regional Economic Integration. 14

Economic Infrastructure. 15

Agglomeration. 16

Economic Scale. 17

Economic Diversification. 19

Spatial Inequality. 20

Core-Periphery Model 21

Theoretical Framework. 23

Economic Geography and Arrow’s Concept of Resource Allocation. 23

Human Capital, Physical Capital, and Political Climate. 24

Model of the Proposed Micropayment System.. 24

Aspects to consider while building a wallet: 26

Human Capital 31

Physical Capital 32

Political Climate. 34

Economic Rationale for Introducing Micropayments. 36

Research Supporting Micropayments. 38

Feasible Mechanism for Promotion. 45

Conclusion. 47

References. 49

Appendices. 63

Cover Letter 63

Additional Material 66


The economic activity we are promoting in this paper is introducing a micropayment system designed explicitly for migrant workers from South and Central America currently residing in the United States. The proposed micropayment system will be primarily based in the United States, which hosts a significant population of these migrant workers. It will also cover the remittance corridor extending to their home countries in South and Central America (Hanieh, 2022).

The economic welfare and stability of migrant workers from South and Central America residing in the United States hinge significantly on their ability to send remittances to their home countries (Ness, 2023). These remittances often represent a crucial lifeline for their families, contributing substantially to the economies of their home countries. However, the current remittance system, especially for smaller amounts, is burdened with high transaction costs and inefficient processing times, significantly diminishing the value of hard-earned money when it reaches the recipients (Ramachandran & Crush, 2021).

According to the World Bank (World Bank, n.d.), remittances to low and middle-income countries reached a staggering $548 billion in 2019, surpassing foreign direct investment flows ($534 billion) and official development assistance ($166 billion). The remittance corridor extending from South and Central America to the United States constitutes a significant portion of this global remittance network (Bersch et al., 2021). Hence, any improvement in the remittance system within this corridor could potentially elevate the economic welfare of countless migrant workers and their families (Ambrosius et al., 2020).

This research addresses the pressing issue of costly and inefficient remittances by introducing a micropayment system specifically designed for this demographic (Aysan et al., 2021). The micropayment system would be based primarily in the United States but would extend to cover the remittance corridor to South and Central America. This system promises to revolutionize remittances by allowing for the transfer of small-value amounts without incurring hefty fees, thereby maximizing the financial resources that reach the families of migrant workers (Mkhatrishvili & Boonstra, 2022).

The proposed system aligns with the economic geography concepts of spatial interaction and regional economic integration. Furthermore, it embodies Kenneth Arrow’s (2012) concept of resource allocation by fostering a more efficient, equitable distribution of resources. In doing so, it is anticipated to spur creativity, innovation, and economic growth within the migrant community in the United States and their home countries in South and Central America (Koyama & Rubin, 2022).

This study seeks to elucidate the potential of this micropayment system and to substantiate its proposed benefits with empirical and theoretical evidence. The research questions that guide this study are: How can a micropayment system improve the efficiency of remittances for migrant workers from South and Central America in the United States? What would be the potential socio-economic impacts of such a system on the migrants and their home countries? Through this research, we aspire to contribute to the discourse on improving financial systems for migrant remittances, bearing significant implications for economic policy, financial technology innovations, and the livelihoods of migrant workers and their families (Andrews et al., 2021).

In the global migration landscape, an economic lifeline often unnoticed is the remittance channel connecting migrant workers with their families back home (de Haas, 2021). These remittances form an economic backbone for countless families and, by extension, their local economies, particularly in the corridor between South and Central America and the United States (Danger, 2020). However, this crucial lifeline is hindered by inefficiencies and excessive transaction costs, especially when handling smaller amounts of money (Settle, 2022). Introducing a micropayment system to alleviate these issues forms the crux of this research.

Migrant workers from South and Central America form a significant demographic in the United States (Lusk et al., 2021). These individuals often undertake low-wage jobs, sacrificing their comfort and safety to send money back home, support their families and contribute to their home economies (León-Pérez et al., 2021). Despite their sacrifices, they are often subjected to high transaction fees and delays when sending remittances, leaving them and their families with less than their hard-earned wages (Loganathan et al., 2019).

The purpose of this research is twofold: firstly, to explore the feasibility and potential benefits of a micropayment system in this context, and secondly, to examine the socio-economic impact such a system could have on the migrants themselves and their home countries in South and Central America. The significance of this study lies in its potential to revolutionize the remittance system for migrant workers, providing them and their families with a more significant share of their earnings and stimulating economic growth in their home countries (Naderi, 2021). It aligns with the economic and geographical concepts of spatial interaction and regional economic integration, as well as Kenneth Arrow’s (Hanna et al., 1996; Storper, 2011) concept of resource allocation.

The key research questions that will guide this study are:

1. How can a micropayment system improve the efficiency and cost-effectiveness of remittances for migrant workers from South and Central America in the United States?

2. What are the potential socio-economic impacts of such a system on the migrant workers, their families, and the economies of their home countries?

The hypotheses to be tested in this research are:

  1. The introduction of a micropayment system can significantly reduce transaction costs and improve the efficiency of remittances for migrant workers from South and Central America in the United States.
  2. Implementing such a system can positively impact migrant workers, their families, and the economies of their home countries.

In addressing these research questions and hypotheses, this study aims to significantly contribute to academic discourse and policy formulation regarding financial systems for migrant remittances (Naderi, 2021).

Literature Review

The complex dynamics of global remittances have been a topic of significant interest in academic and policy-oriented literature. Remittance systems have been scrutinized for their efficiency, cost-effectiveness, and impacts on the economic welfare of individuals and nations alike (Stiegler, 2013). Existing remittance systems often employ limited traditional banking or money transfer services (Hennebry et al., 2017). For migrant workers, particularly those earning low wages, high transaction fees and sluggish processing times are major hindrances, often eating into the much-needed funds destined for their families (Sriskandarajah, 2005). These issues are amplified in the remittance corridor extending from South and Central America to the United States, where migrant workers constitute a significant portion of the labor force (Hanieh, 2019).

Arrow’s (1962) concept of resource allocation holds considerable relevance in this context. It argues for an efficient and equitable allocation of resources to foster economic welfare and stimulate creativity and innovation. This perspective can be directly applied to the issue of remittances, where an efficient allocation of resources would entail a system that ensures maximum remittance value reaches the recipient, thereby improving the economic welfare of the migrant workers’ families and their home countries (Stiegler, 2013).

Although limited, research on micropayment systems has highlighted their potential to address cost and efficiency issues in small-value transactions (Pfeiffer, 2019). With advances in financial technology, these systems have been gaining traction, offering a promising solution to the challenges faced by migrant workers (Naderi, 2021). Micropayment systems refer to digital transactions involving small amounts of money, often less than a dollar. These systems are particularly beneficial for online transactions, where traditional payment methods might be less efficient or too costly.

First, micropayment systems can address cost and efficiency issues in small-value transactions, as suggested by Pfeiffer (2019). Traditional transaction methods usually involve a flat fee or percentage, making them costly for small transactions. Micropayment systems, on the other hand, can process smaller transactions at much lower costs. They also tend to be quicker, as they are designed to handle high volumes of transactions efficiently. This efficiency and cost-effectiveness make micropayment systems attractive for a range of online services, such as purchasing digital content (like articles, music, or in-app purchases) or for micro-donations to content creators and charitable causes.

The second point by Naderi (2021) introduces another potential advantage of micropayment systems: aiding migrant workers. Migrant workers often send money back home to their families. These remittances are crucial for the economies of many developing nations. However, traditional money transfer systems often charge high fees. Here, micropayment systems could play a transformative role by making these transactions cheaper and faster.

Moreover, these systems could extend financial services to underbanked or unbanked populations. For migrant workers without access to traditional banking services, this could be a game-changer. While adopting micropayment systems is promising, it’s also crucial to consider potential challenges. These might include technical issues, such as the need for a robust infrastructure to handle a high volume of transactions; security concerns, since financial transactions are always a target for cybercriminals; and regulatory questions, as financial transactions are typically subject to various laws and regulations (Ayofe & Irwin, 2010).

Spatial Interaction

Introducing the micropayment system could fundamentally reshape the dynamics of the remittance process and, consequently, the spatial interaction patterns between migrant workers in the United States and their families in South and Central America (Simon, 2016). Traditionally, remittance payments have been periodic, often once or twice a month, and typically involve the transfer of more considerable lump sums (Amuedo-Dorantes et al., 2005). This pattern is primarily because each transaction incurs a fee regardless of the amount, making frequent transactions of small amounts financially impractical. However, by leveraging technology to allow for low-cost or potentially free transactions of small values, the proposed micropayment system can break down these barriers and enable a far more fluid and dynamic exchange of funds(Hernandez-Verme & Valdes Benavides, 2013).

This shift can pave the way for more instantaneous transactions, which means that migrant workers can send money home as and when they earn it or when their families need it, as opposed to waiting to accumulate a more considerable sum (Fullenkamp et al., 2008). Such a system could even allow migrant workers to participate more actively in household decisions by sending money earmarked for specific expenses such as groceries, school fees, or healthcare costs (Tinti & Reitano, 2018).

Importantly, this could empower female migrant workers (Maimbo & Ratha, 2005). Women comprise a substantial proportion of the migrant workforce and are often involved in domestic or caregiving jobs. With the ability to send money home in real-time, these women could directly contribute to and influence household and family decisions, enhancing their agency (Bheemaiah, 2017). This could further have positive spillover effects on the welfare of their families, given the body of research indicating that resources controlled by women are more likely to be used for family welfare and children’s education (Samman & Santos, 2009). Overall, this transformation of the remittance process brought about by the micropayment system could enhance spatial interaction, redefine the economic landscape of remittances, and empower individual migrant workers, particularly women, with greater financial control and independence (Rempel & Lobdell, 1978).

Economic Landscape

A few dominant players have traditionally dictated the economic landscape of remittance flows. These are conventional banking systems and dedicated money transfer services (Hudson, 2008). These systems, characterized by high transaction costs and slower processing times, often lead to less frequent, larger lump-sum transfers (Donovan, 2012). This, in turn, results in sporadic influxes of capital in the home countries of migrant workers, making it difficult for families to manage and plan their expenses effectively (Lichtfous et al., 2018).

A micropayment system could disrupt this pattern by enabling more frequent, smaller transfers (Donovan, 2012). Instead of sporadic lump-sum remittances, we could witness a smoother, more consistent flow of funds. This regular and reliable flow of funds could lead to increased financial stability for families and even stimulate local economies by facilitating more predictable spending and saving habits (Hudson, 2008). Moreover, by democratizing access to low-cost remittance transactions, the micropayment system could potentially encourage more individuals to use formal remittance channels rather than informal, unrecorded methods (Nanchengwa, 2022). This would increase the safety and security of these transactions and contribute to more accurate data on remittance flows, aiding in economic planning and policy-making (Bheemaiah, 2017).

Enabling migrant workers, particularly women, to send money home as and when they earn it can have significant implications for savings and household financial management (Goldring, 2004). Research suggests that women are often more likely to allocate resources toward family welfare, children’s education, and savings for the future (Ashraf et al., 2010). Thus, providing female migrant workers with the ability to directly manage remittances can result in more efficient use of funds and better long-term financial planning.

In traditional remittance systems, the lump-sum nature of transactions often leads to spending the received funds quickly or investing them in more significant projects (Matin et al., 2002). However, with micropayments, families can receive funds more regularly and in smaller amounts. This shift can promote better budgeting and a more consistent allocation of resources to daily needs, education, healthcare, and savings (Lietaer, 2001). In addition, sending micropayments allows migrant workers to respond in real-time to their family’s needs, giving them a more active role in managing the household, despite being geographically distant (Carling, 2014).

For female migrant workers, this could mean more significant involvement in their families’ lives and more direct control over how their hard-earned money is used (Karlan et al., 2014). Ultimately, a micropayment system can help migrant families, particularly those with women as primary earners, to create a more secure and stable economic landscape at the household level. It provides better savings and budgeting and fosters greater financial inclusion and empowerment for women (Ashraf et al., 2010).

Location Theory

In economic geography, location theory involves understanding and analyzing how the geographic location of economic activities affects those activities and the economic outcomes (Audretsch & Feldman, 2004). Factors such as distance, proximity to resources or markets, and regional attributes can all impact the effectiveness and efficiency of economic activity. In the case of our proposed micropayment system, the geographic location and specific needs of the migrant workers are central to the system design. The high density of migrant workers in certain U.S. cities and states means these areas become crucial points of origin for remittance flows. Similarly, the home countries of these workers in South and Central America form the vital endpoints of these flows (Burgess et al., 2022).

This remittance corridor, as determined by the geographic spread of the migrant population, influences several aspects of the micropayment system. For example, the system must be designed to navigate and comply with the financial regulations and systems at both ends of this corridor. It must also be accessible and easy for workers with varying financial literacy levels and technology access. Additionally, understanding the specific needs of these migrant workers, such as the desire for low transaction costs and quick transfer times, further tailors the system to its users (Malmberg & Maskell, 2002). By catering to these needs, the micropayment system can provide a service that not only benefits the migrant workers and their families but can also promote economic activity and growth in their home countries.

Regional Economic Integration

The enhanced economic trade could catalyze regional economic integration, fostering a sense of cohesion and unity among the nations involved. Regional Economic Integration refers to unifying economic policies between states by abolishing economic borders (Wilks, 2011). In our context, this means creating a fluid network of economic transactions that seamlessly bridges the United States with South and Central America, thereby creating a harmonious remittance corridor (Khanna, 2016). The simplification of cross-border transactions through the micropayment system can aid in aligning financial systems across these regions.

The system would allow for the smoother movement of capital, reducing barriers that typically hinder economic interaction between these countries, such as high transaction fees and slow processing times (Dixit, 1998). Furthermore, this system could pave the way for a more inclusive regional economic integration. It could allow migrant workers and their families, who might previously have been excluded from formal financial systems (Massey et al., 1993), to participate in regional economic activities (Aduda & Kalunda, 2012). Escribà-Folch et al. (2022, p. 42) take remittances, and note that these “undermine electoral authoritarianism” improving democracy “by lowering turnout among those who support is most easily purchased by incumbent ruling parties”. Such effects bring positive change both economically and politically.

Many individuals in developing countries lack access to investment opportunities in global firms that drive growth in developed economies. The micropayment system could democratize access to these investment opportunities by allowing migrant workers to save and invest their earnings in these global firms (Khanna, 2021). This benefits the individuals involved by potentially increasing their wealth and allows for the flow of capital from developed to developing economies, contributing to global economic growth (Kessides, 1993).

Economic Infrastructure

Economic infrastructure refers to the large-scale physical systems, services, and facilities necessary for the functioning of an economy. These can include transportation systems, power facilities, and communication networks. In the context of a micropayment system, the economic infrastructure of the countries involved plays a crucial role. For one, the micropayment system would heavily rely on the existing telecommunications infrastructure. Internet access, mobile connectivity, and digital platforms are prerequisites for the system to operate effectively. The more developed the telecommunications infrastructure, the more accessible and reliable the system becomes. As Escribà-Folch et al. (2022, p. 35) demonstrate, whether alone or in partnership, “migrant clubs financed the construction of public infrastructure such as schools, hospitals, electrification, paving projects or recreation areas” and that these come through a combination of individual remittances transferred in a way that empowers immigrants and their families.

The financial services infrastructure also forms an integral part of the system. This includes banking institutions, payment processors, and regulatory bodies that would handle and oversee the transactions made through the system. A robust financial infrastructure would allow for smoother and safer transactions, enhancing the user experience. Interestingly, the introduction and widespread adoption of the micropayment system (Lee & Low, 2018) could also stimulate further development in these areas of infrastructure. The increased demand for reliable internet and financial services could drive investment and improvements in these sectors. In the long run, this could lead to broader benefits, such as enhanced digital literacy, improved financial inclusion (Lichtfous et al., 2018), and overall economic development. In this way, a micropayment system is not just a product of the existing economic infrastructure but could also be a catalyst for further development. This interplay reinforces the importance of considering infrastructure in economic and geographic analyses and underscores the potential of our proposed system to contribute to infrastructure development.


Agglomeration is a critical concept that could significantly influence the successful implementation of a micropayment system (Velazquez et al., 2022). Agglomeration is the spatial clustering of people, businesses, or activities in a specific area. Such concentration can lead to mutual benefits, such as shared resources, information exchange, and larger markets. In our case, it makes sense to focus on the initial deployment of the micropayment system in areas with a high density of migrant workers who would be the primary users of the system.

Velazquez et al. (2022, p. 7) note that “it must be observed that recent literature does not connect the importance of financial inclusion to traditional financial institutions because banks did not attend to an unprofitable demand that was expensive to provide.” In part, scale is critical, and the agglomeration of groups in an area will aid in deploying the Micropayment system. As the system scales, the ability to earn revenue through volume increases.

Areas with high concentrations of migrant workers would provide a readily available and substantial user base for the system (Mohan, 2020). As the system would primarily be used for remittance, areas with large numbers of migrant workers would naturally see a higher demand for the service. Furthermore, launching in these areas could provide valuable early feedback and insights, which can be used to refine and improve the system. Word-of-mouth can also spread more easily in these tightly-knit communities, which could help accelerate system adoption (Centola, 2021).

Finally, agglomerations often have developed infrastructure and services that can support the implementation and usage of the system. For example, areas with dense migrant populations often have more established financial services, communication networks, and other relevant facilities. Thus, leveraging the concept of agglomeration for the initial deployment of the micropayment system could significantly enhance its chances of success and acceptance within the target user group. This process could create a tipping point that allows the system to expand (Lenton et al., 2022) naturally.

Economic Scale

Economic scale refers to the cost advantages that entities may achieve due to their size, output, or scale of operation, with larger scales often leading to lower costs per unit. This phenomenon is typically due to the spread of fixed costs over a larger number of units, procurement of inputs in bulk at discounted rates, and operational efficiencies gained through learning and experience (Iskow, 1993). In the case of a micropayment system, as more migrant workers adopt the service for their remittance needs, the cost of managing and operating the system can be spread over a larger volume of transactions (Shang et al., 2023). This could lead to lower costs per transaction, thereby allowing the system to offer competitive, if not lower, fees compared to traditional remittance services (Metzger et al., 2019).

Moreover, a larger scale of operation could attract further investment and support from financial institutions, government entities, and other stakeholders, which could further reduce operational costs and contribute to the overall sustainability of the system (Deschryver & De Mariz, 2020). Additionally, as the system grows and matures, operational efficiencies could be gained through technological advancements, refinement of processes, and the accumulation of knowledge and expertise. These efficiencies could further drive down costs and enhance the value proposition of the micropayment system for its users.

Economic scale is deeply intertwined with any micropayment system (Schweizer et al., 2020). Economic scale refers to the cost advantages that businesses or systems can achieve due to their size, output, or scale of operation. As the scale of operation increases, the cost per unit of output decreases, making the business or system more efficient and cost-effective. A micropayment system can easily exploit this concept. As more migrant workers adopt the system for remitting money to their home countries, the volume of transactions will increase, and the costs associated with each transaction can be reduced, reflecting the economies of scale. This is particularly crucial for migrant workers who remit small amounts of money (Ahmed et al., 2021), as the relative burden of transaction costs is usually higher for smaller transactions.

However, the potential of a micropayment system goes beyond reducing transaction costs. By enabling the transfer of minimal amounts of money at a low cost (possibly even under a thousandth of a cent), the system eliminates a significant psychological barrier to financial transactions (Trivedi et al., 2021). The prospect of paying transaction fees deters individuals from making small payments, even when such payments are necessary or beneficial. With low-cost micropayments, individuals are more likely to engage in these transactions, potentially leading to more vibrant economic activity.

This resonates with Coase’s theory of transaction costs, which posits that people will carry out transactions until the cost of performing another transaction outweighs the benefit (Schmidt & Wagner, 2019). By significantly reducing transaction costs, the micropayment system could encourage more transactions, fostering economic exchange and cooperation. Moreover, the system’s ability to handle frictionless transactions can open up new possibilities.

For instance, it can facilitate real-time payments for digital services, pay-per-use services, crowdfunding for micro-projects, direct tipping to content creators, micro-donations to charities, and much more. Many of these opportunities remain underexplored due to the high cost and inconvenience of processing small payments(White & Marchet, 2021). Such a system has an immense potential to revolutionize how we think about and engage in economic transactions, particularly for migrant workers and their home economies.

Economic Diversification

Economic diversification refers to how a region, country, or economy expands to include various industries, sectors, or economic activities (McMillan & Rodrik, 2011). This diversification can strengthen an economy, making it more resilient to shocks, and stimulate economic growth by creating new opportunities for income and employment. With micropayment systems, economic diversification could occur in multiple ways. Firstly, the system represents a new economic activity within the financial services sector. By creating a new method for migrant workers to send remittances, it introduces a new player into the market, thus diversifying the financial services available (North, 1955).

Furthermore, by reducing transaction costs and increasing the efficiency of remittances, the micropayment system could indirectly stimulate the creation of other economic activities, particularly at the grassroots level. For example, recipients of remittances could use these funds to start or grow small-scale entrepreneurial endeavors, from setting up local shops to investing in agricultural projects (Conway & Cohen, 2008). This entrepreneurial activity diversifies the local economy, creates job opportunities, and promotes local development.

In addition, the proposed system could also encourage diversification within the digital economy. As the system grows and evolves, there might be opportunities to expand its features and services, such as providing microloans or facilitating micro-investments. Thus, through economic geography, the proposed micropayment system could contribute significantly to economic diversification in the regions receiving remittances and in the broader financial and digital sectors (Conway & Cohen, 2008).

Spatial Inequality

Spatial inequality refers to the unequal distribution of resources, wealth, investment, and opportunity across different geographical locations (Abdulai, 2014). Stark contrasts in income, living conditions, and economic opportunities between different places often mark it. In the context of our study, spatial inequality is evident in the economic disparities between migrant workers’ host and home countries and within the countries themselves. By introducing a micropayment system, both government and corporations can contribute to mitigating spatial inequality in several ways. First, by reducing transaction fees and increasing the efficiency of remittances, the system ensures that more migrants’ earnings reach their families back home. This can lead to an increase in the disposable income of these households and improve their living conditions, contributing to a reduction in spatial inequality (Conway & Cohen, 2008).

Second, the system could foster greater financial inclusion. Access to financial services is often limited in less-developed areas due to various barriers such as cost, distance, and lack of documentation. The micropayment system, which operates on a digital platform, can be more accessible to people in remote areas, allowing them to participate in the formal economy and potentially improving their economic prospects (Cámara & Tuesta, 2014).

Lastly, as discussed earlier, the system can stimulate economic diversification by enabling remittance recipients to invest in small-scale entrepreneurial activities. These new businesses can provide employment opportunities and contribute to wealth generation locally, further helping reduce spatial inequality (Mukherjee & Sood, 2020). In this way, the proposed micropayment system, through the lens of economic geography, holds the potential to alleviate spatial inequality, leading to a more equitable distribution of wealth and resources across space.

Core-Periphery Model

The core-periphery model (Klimczuk & Klimczuk-Kochańska, 2019) describes the spatial relationship and economic disparity between developed ‘core’ countries, which are characterized by high levels of development, technological advancement, and wealth, and less developed ‘periphery’ countries, which often rely on exporting raw materials to the core and are characterized by lower levels of development and wealth (Ross, 2012). Introducing an efficient micropayment system could disrupt this model in several ways. Firstly, by making remittance transactions more efficient and less costly, the system transfers wealth from the core (where many migrant workers are based) to the periphery (their home countries). This could contribute to economic development and reduce poverty in the periphery countries (Ross, 2012).

Secondly, by facilitating financial inclusion and enabling remittance recipients to engage in entrepreneurial activities, the system could stimulate economic diversification in the periphery countries. This could reduce their dependence on limited export commodities and foster more sustainable and inclusive growth (Klimczuk & Klimczuk-Kochańska, 2019).

Thirdly, the system could contribute to empowering individuals in the periphery (Ross, 2012). With increased financial resources and opportunities, they could better participate in the economy and make choices that improve their lives. This process could gradually shift the power dynamics between the core and the periphery. Innovative financial solutions can contribute to more balanced and inclusive global development.

Theoretical Framework

The theoretical framework of this study is rooted in two main areas: Economic Geography (Coe et al., 2019) and Arrow’s concept of resource allocation (Hurwicz, 1973). To better comprehend the potential impacts of our proposed micropayment system, we must consider it within the context of these theories. Moreover, our framework emphasizes the interplay of human capital, physical capital, and the political climate in shaping economic activities and outcomes (Arrow, 1962).

Economic Geography and Arrow’s Concept of Resource Allocation

Economic geography provides a lens through which we can examine the spatial distribution of economic activities and understand how location, distance, and size affect these activities (Beugelsdijk & Mudambi, 2013). This is particularly pertinent to our study, given that we aim to facilitate cross-border transactions for migrant workers from South and Central America to the United States. In this regard, key concepts such as spatial interaction, economic landscape, location theory, and core-periphery model provide valuable insights into how our proposed micropayment system could reshape the remittance landscape and contribute to regional economic development (Dicken, 2007).

Arrow’s concept of resource allocation complements this geographic perspective. It argues that allocating resources is efficient when it maximizes social welfare, which is the sum of individual utilities (Arrow, 1962). By reducing the transaction costs of remittances, our proposed micropayment system could enhance the welfare of migrant workers and their families by ensuring that a greater share of their earnings is retained. This allocation of resources could also stimulate economic activities and foster innovation, aligning with Arrow’s concept (Arrow, 2012).

Human Capital, Physical Capital, and Political Climate

The success of implementing a comprehensive and large-scale micropayment system rests heavily on three main pillars – human capital, physical capital, and political climate (Ali et al., 2017).

Firstly, human capital, defined by the aggregation of skills, knowledge, and experiences of migrant workers, plays a pivotal role (Lulle et al., 2021). The degree to which these individuals can adopt and effectively utilize the micropayment system depends on their understanding and familiarity with digital tools. Consequently, substantial investment must be directed towards education and training initiatives (Lanzi, 2007). Such programs would aim to equip migrant workers and their families with the necessary digital literacy skills, thus enabling them to confidently navigate the intricacies of the micropayment system.

Secondly, the availability and reliability of physical capital are indispensable (Choi & Whinston, 2000). The functioning of a micropayment system necessitates a robust digital and financial infrastructure. This includes consistent and accessible internet connectivity, secure and trustworthy financial transaction systems, and widespread access to digital devices such as smartphones and computers (Jahid et al., 2023). Therefore, infrastructural enhancements, particularly in regions with high concentrations of migrant workers, must be prioritized to ensure the feasibility and effectiveness of the micropayment system.

Model of the Proposed Micropayment System

Our proposed model for the micropayment system is designed to be efficient, accessible, and user-friendly (Jahid et al., 2023). It envisages a digital platform where users can create an account, link it to their bank account or digital wallet, and make transactions with minimal fees. The system would leverage advanced encryption technologies to ensure the security of transactions, and user support services would be available to assist with any issues. Its development and implementation would consider the considerations discussed in this theoretical framework to maximize its potential benefits for migrant workers and their home economies (Rapoport & Docquier, 2006).

An innovative aspect of our proposed model involves the integration of a Central Bank Digital Currency (CBDC) running on the Bitcoin (BSV) blockchain. This feature extends the capabilities of the system, leveraging the unique characteristics of these digital assets to enhance functionality and user experience. Our proposed micropayment model innovatively incorporates a Central Bank Digital Currency (CBDC) running on the Bitcoin SV (BSV) blockchain. Bitcoin SV’s unique scalability, supporting millions of transactions per second at lower costs with higher volumes, and CBDC’s regulatory stability and equivalence to national fiat currency synergize to form an efficient, secure, and inexpensive remittance system (ng Pilipinas, 2020). This integration offers users instantaneous transactions and low-cost services and opens up new economic opportunities (Jameaba, 2023), such as savings, exchange of foreign currencies, and protection against local economic instability. This system delivers unprecedented stability, speed, and cost-effectiveness, transforming the remittance landscape for migrant workers and their families (Naderi, 2021).

Bitcoin (BSV) stands out among digital cash systems for its scalability and low transaction costs. It has the capacity to handle hundreds of thousands to millions of transactions per second, and the transaction fees are exceptionally low, remaining under 0.01 US cents. Significantly, these fees decrease as the system scales, unlike traditional systems where costs increase with scale. By leveraging BSV, our micropayment system can deliver fast, cost-efficient transactions, making it an ideal platform for remittance services (Jameaba, 2023).

Integrating a CBDC into this framework introduces a new level of stability and functionality. CBDCs are digital forms of a country’s fiat currency backed by the central bank, inheriting the same value and trust as physical cash. Incorporating a CBDC would provide users with the convenience of instant, global transactions while ensuring stability and trust in the value of their assets. This function is particularly beneficial for migrant workers who need to convert their earnings into their home currency, allowing them to exchange at favorable rates instantly (Calvo et al., 1996).

Moreover, the dual-currency feature of our model provides a hedge against potential economic instability (Frankel, 1979). Users would have the flexibility to hold both U.S. and their local currency, allowing them to switch between the two when necessary. In times of inflation or economic downturns in their home country, users could opt to keep their savings in U.S. currency, protecting their wealth from economic volatility.

This extended model of the proposed micropayment system offers a breakthrough in remittance services. By combining the scalability and efficiency of Bitcoin (BSV) with the stability and trust of CBDCs, the system can provide migrant workers with a more secure, efficient, and economical means of sending money to their families, thereby promoting economic growth and stability in their home countries.

Aspects to consider while building a wallet:

While a consolidated list of requirements and features for building a comprehensive wallet to facilitate remittances with Central Bank Digital Currency (CBDC) over the Bitcoin (BSV) blockchain needs to be tested, the following points represent the essential features of a system that can deliver global remittance services (Naderi, 2021).

  1. Multi-Currency Support: The wallet must support multiple currencies, including CBDCs, to enable seamless transfers and conversions.
  2. CBDC Integration: It must integrate with the central bank’s CBDC infrastructure to ensure compatibility and interoperability.
  3. KYC and Tax Compliance: Incorporate robust Know Your Customer (KYC) procedures to verify users’ identities and facilitate tax reporting for transactions exceeding certain thresholds.
  4. Government Linkage: Establish a secure linkage with government systems to facilitate the recording and sharing of relevant payment and tax information.
  5. Threshold Monitoring: Monitor transaction amounts and trigger additional KYC and tax reporting requirements when government-set thresholds are reached.
  6. Privacy and Security: Implement robust encryption and authentication mechanisms to safeguard sensitive information.
  7. Multilingual Interface: Ensure the wallet is accessible by supporting various languages.
  8. User-Friendly Experience: The interface should be intuitive and easy for experienced and novice users to navigate.
  9. Low Transaction Costs: Leverage efficient blockchain technology and optimization strategies to provide cost-effective remittance services.
  10. Reliable Customer Support: Offer a responsive customer support system to promptly address user queries, concerns, and technical issues.
  11. Scalability and Performance: The wallet should be designed to handle a high volume of transactions and accommodate future growth in user adoption.
  12. Regulatory Compliance: The wallet must adhere to local and international regulations, including anti-money laundering (AML), counter-terrorism financing (CTF) measures, and data protection laws.
  13. Integration with Communication Platforms: Enhance social connectivity by allowing users to communicate directly with their families and support networks through the wallet interface.
  14. Currency Exchange Functionality: Incorporate a user-friendly and secure digital currency exchange feature, providing competitive rates and quick transactions.
  15. Wallet Accessibility: Ensure that the wallet can be accessed across multiple devices and platforms, allowing users to access their funds anytime, anywhere.
  16. Cross-Border Transactions: Support seamless and efficient cross-border transactions, considering international transfer protocols and regulatory compliance.
  17. Real-Time Transaction Processing: Ensure the system can handle and process transactions in real-time, providing users with immediate confirmation and reducing transaction time.
  18. Disaster Recovery and Business Continuity Plan: Implement a robust disaster recovery and business continuity plan to protect data and ensure system functionality in the event of any operational disruptions or security threats.
  19. Software Updates and Maintenance: Regularly update software to enhance security, fix bugs, and improve user experience.
  20. Interoperability: The wallet should be interoperable with other systems and platforms, facilitating easy integration and compatibility with other financial tools and services.

By incorporating these key points in the design and development process, creating a Bitcoin wallet for CBDC remittances that is secure, user-friendly, compliant with regulations, fosters financial inclusion and offers efficient remittance services would be possible.

  • Offline Functionality: The wallet should support some degree of offline functionality for users with intermittent internet access. This can be crucial in certain regions where internet connectivity is inconsistent, ensuring that users can still view their balance and transaction history and prepare transactions for when they next have internet access.
  • Disaster Recovery: The wallet should incorporate a robust backup and disaster recovery strategy to protect user data and funds in case of unforeseen incidents. This includes encrypted backups of the user’s private keys that can be recovered with a passphrase known only to the user.
  • Accessibility Features: The wallet should include features that make it accessible to all users, including those with disabilities. This includes support for screen readers, high contrast modes, and other assistive technologies.
  • Customizable Security Settings: While maintaining high minimum security standards, the wallet should also offer customizable security settings for advanced users. These might include more complex multi-signature transactions, time-locked transactions, and other advanced security features.
  • Fee Management: The wallet should provide transparent information about transaction fees and offer options for users to manage these fees when network congestion varies. This may include a sliding scale for urgency versus cost or the ability to replace transactions with higher fee versions if they are not confirmed quickly enough.
  • Open-Source Code: Providing open-source code for the wallet software can encourage trust and transparency. It allows the community to review the code, find and fix bugs, and ensure no hidden malicious functions exist.
  • Blockchain Education: To maximize user engagement and trust, the wallet should include educational resources that explain how the blockchain and cryptocurrencies work, how to securely manage and recover keys, how to interpret transaction information, and how to avoid common scams and pitfalls.
  • Sustainability: Lastly, consideration of the environmental impact of the wallet’s operation, including the blockchain’s energy consumption, could be a selling point for environmentally-conscious users.

These additional features, supporting multi-currency transactions including CBDCs, seamless government linkage, stringent KYC and tax compliance procedures, robust security measures, multilingual interface, low-cost transactions, and integrated communication platforms, will significantly enhance the wallet’s overall user experience (Lastra & Allen, 2019). These elements bolster the security of the platform, fostering trust among users while also enabling inclusivity by providing services in multiple languages. Furthermore, the wallet’s ability to facilitate instant, low-cost transactions reduces the barriers often associated with cross-border remittances (Shneiderman & Plaisant, 2010). The integration of communication platforms enhances the user experience, allowing them to maintain social connections while executing financial transactions.

Transparency is maintained through the wallet’s secure linkage with government systems, promoting regulatory compliance and further instilling trust. The seamless integration of CBDCs enables users to take advantage of the benefits offered by these digital currencies, providing a robust, secure, and flexible solution for remittances (Naderi, 2021). The cumulative effect of these features is a transformative shift in the remittance landscape, enhancing user adoption by providing an efficient, secure, and inclusive platform that seamlessly blends traditional financial systems with digital innovation.

Human Capital

In this context, human capital (Sanders & Nee, 1996) refers to the skills, knowledge, and experience of migrant workers in the U.S. These individuals represent a valuable labor force that contributes significantly to their host and home country’s economies. As such, it is essential to ensure they have access to efficient, cost-effective remittance systems. Further, introducing a micropayment system might incentivize skill development in financial technology among these workers and their families, thereby enriching the human capital in this geographic corridor.

Developing and disseminating a transformative remittance solution like a micropayment system serves a primary economic function and significantly impacts human capital development. For instance, the implementation process could drive digital literacy and technical skills among migrant workers and their families (Naderi, 2021). As these individuals learn to navigate the new system, they’re indirectly exposed to foundational digital finance, blockchain technology, and cybersecurity concepts, expanding their skill set.

Moreover, this also encourages engagement with the broader digital economy. As users gain confidence with digital transactions, they may explore other online financial services such as e-commerce, digital banking (Hudson, 2008), and online investments, spurring further self-education and digital empowerment. Thus, the micropayment system has the potential to evolve into a robust digital platform, serving as an entry point to the digital economy for its users.

Further, as more migrant workers become familiar with these technologies, they could become promoters and trainers within their communities (Conway & Cohen, 2008), fostering a network effect. This communal learning environment helps to accelerate the adoption of the system and increases its overall utility (Cohen & Nelson, 2011). This phenomenon could also generate ripple effects on education and labor markets. Demand for more advanced digital skills might stimulate local education providers to introduce or expand relevant training programs. Employers might also value these new skills, particularly in sectors where digital payment platforms are prevalent.

In conclusion, introducing a remittance-based micropayment system can enhance human capital by fostering digital literacy and skill development. This, in turn, can lead to more significant economic participation and integration of migrant workers and their families in their host and home countries (Conway & Cohen, 2008).

Physical Capital

Physical capital encompasses the physical infrastructure and technological capabilities facilitating the micropayment system (Kramer et al., 2007). This includes the existing financial infrastructure, telecommunication networks, and mobile technology platforms critical for deploying the proposed system. The accessibility and usability of these platforms across different geographic regions in the U.S. and South and Central America need to be assessed. Factors such as internet connectivity, smartphone penetration, and access to banking services will all impact the feasibility and effectiveness of the micropayment system (Shim et al., 2013).

The role of physical capital in deploying the proposed remittance-based micropayment system cannot be overstated (Swan, 2015). A well-established and efficient physical infrastructure ensures that such a system functions optimally and can serve its users with minimal interruptions. Internet connectivity is the backbone of the micropayment system. High-speed, reliable internet is necessary to facilitate the fast, real-time transactions that are the hallmark of such systems. As such, investments may be needed to improve internet connectivity in urban and rural areas, particularly in regions of South and Central America where coverage may be insufficient (Goldring, 2004). This could involve partnerships with telecommunication companies to enhance the existing infrastructure and expand coverage.

Next, the ubiquity of smartphones is another critical factor. The micropayment system will be accessed primarily through mobile applications, so widespread smartphone access is crucial. Therefore, efforts should be made to ensure affordable access to smartphones and other digital devices in communities with lower incomes or limited resources (Ambrosius et al., 2020). These efforts could involve collaborations with tech companies, government subsidies, or non-profit initiatives.

Banking infrastructure is pivotal in facilitating the proposed system, particularly concerning integrating Central Bank Digital Currency (CBDC). Robust banking systems would be needed to manage the issuance, circulation, and regulation of the CBDC. Furthermore, financial institution’s willingness to collaborate with and adapt to this new system will influence its successful implementation. Lastly, removing the need for physical access points such as ATMs or bank branches could also play a role, especially for unbanked or underbanked individuals (Carling, 2014). These access points could allow for physical cash deposits and withdrawals. Removing the necessity for these systems would make the system more accessible to those without full access to traditional banking services.

The deployment of the micropayment system necessitates healthy physical capital. Internet connectivity, smartphone access, banking infrastructure, and physical access points will be critical determinants in its successful roll-out and usability. Addressing these requirements effectively could lead to a seamless, efficient, and inclusive remittance service that caters to the needs of migrant workers and their families, regardless of their geographic location or economic status.

Political Climate

The political climate in the U.S. and the migrant workers’ home countries can significantly influence the success of the proposed system. Regulatory support from the governments, in the form of favorable policies and regulations, will be crucial for implementing and operating the micropayment system. Key considerations here include laws related to financial transactions, data privacy, and cybersecurity. The bilateral relations between the U.S. and the home countries also matter as this will impact the cross-border transfer of funds (Escribà-Folch et al., 2022). Engaging with policymakers and regulators ensures the micropayment system aligns with local and international laws and regulations.

Through the lens of economic geography, we can understand the factors that will influence the implementation and success of the proposed micropayment system. By taking these factors into account, we can design a system that is tailored to the specific needs and conditions of the migrant workers, thus increasing the likelihood of its acceptance and widespread adoption. Understanding and navigating the political climate is indispensable to successfully deploying the proposed remittance-based micropayment system (Hennebry et al., 2017). The political environments in the U.S., as well as in the home countries of the migrant workers, can either facilitate or obstruct the implementation and operation of the system.

The need for regulatory support and approval from respective governments is at the forefront. Government regulations governing financial transactions, digital currencies, data protection, and cybersecurity directly influence the design, functionality, and compliance measures incorporated into the system. It is critical to ensure that the micropayment system adheres to all relevant local and international laws to foster trust among users and prevent legal complications (Hennebry et al., 2017).

Governments can also play an active role in promoting the adoption of the system (Sharma, 2007). Favorable policies, such as those incentivising digital remittances or providing support for the necessary digital and financial literacy training, can significantly enhance uptake among migrant workers and their families. Governments could also collaborate in raising awareness about the benefits and safety of the proposed system (Escribà-Folch et al., 2022). Furthermore, bilateral relations between the U.S. and the migrant workers’ home countries can significantly impact the ease and efficiency of cross-border fund transfers. Positive diplomatic relations can expedite the establishment of necessary agreements for such transfers, while strained relations might pose challenges.

In addition, political stability in these countries is a crucial consideration. In volatile political environments, regulatory landscapes can change rapidly, possibly affecting the operation of the micropayment system (Pfeiffer, 2019). On the other hand, stable political climates are more conducive to the long-term planning and execution of such complex projects (Abdulai, 2014). Political climate plays a pivotal role in the successful implementation and operation of the micropayment system. Constructive engagement with policymakers and regulators, understanding and adhering to financial regulations, leveraging favorable policies, and maintaining good diplomatic relations are key strategies in navigating the political landscape (Escribà-Folch et al., 2022). By doing so, the system can be designed to meet the specific needs of the migrant workers and comply with regulatory requirements, thereby increasing its likelihood of acceptance and widespread adoption.

Economic Rationale for Introducing Micropayments

Launching a micropayment-based remittance system holds strong economic rationale due to its potential to address various key factors, including reducing spatial inequality, creating economies of scale, and reflecting the love of Christ by serving vulnerable populations. By implementing a micropayment system, a more equitable distribution of resources can be achieved, ultimately leading to increased economic stability and growth (Abdulai, 2014).

Firstly, micropayments can reduce spatial inequality. In many societies, a significant divide exists between urban and rural areas, with urban centers typically enjoying greater access to resources and economic opportunities (Hanieh, 2019). This disparity exacerbates income inequality and hampers the development of rural communities. Individuals in remote or underserved regions can participate more actively in economic transactions by enabling micropayments. The flexibility and affordability of micropayments can open up opportunities for rural populations to access digital content, engage in e-commerce, or participate in the sharing economy. This helps bridge the spatial divide and empowers marginalized communities to contribute to and benefit from economic growth.

Secondly, implementing a micropayment system can create economies of scale (van Someren, 2002). Traditionally, high transaction costs and barriers to entry have limited the participation of small-scale businesses and entrepreneurs in the digital economy. Micropayments lower these barriers by enabling users to make small, affordable payments for specific content or services. This allows small businesses and content creators to monetize their offerings incrementally, attracting a more extensive user base and driving economies of scale. By reducing the costs and complexities associated with traditional payment systems, micropayments facilitate the growth of innovative start-ups, fostering entrepreneurship and stimulating economic development.

Furthermore, introducing a micropayment system reflects the love of Christ by serving vulnerable populations (Blanchard & Hodges, 2008). Micropayments offer a means to support and empower marginalized communities, such as low-income individuals, refugees, or those without access to traditional financial services. A micropayment system can enable these populations to access essential goods and services, educational resources, healthcare, and other life-enhancing opportunities by providing affordable and inclusive payment options. Such a system aligns with the Christian values of compassion, justice, and care for the vulnerable, ensuring that economic transactions prioritize the well-being and dignity of all individuals.

In addition to the economic benefits, the proposed micropayment system also promotes ethical and socially responsible practices. It allows content creators and service providers to avoid relying on intrusive advertising models that compromise user privacy and experience. By offering a direct payment option, the micropayment system minimizes the need for invasive data collection and targeted advertising, creating a more respectful and trustworthy digital environment. This resonates with the Christian principle of treating others with love and respect, ensuring that users are valued beyond their role as consumers (Blanchard & Hodges, 2008).

In conclusion, introducing a micropayment system presents a compelling economic rationale by addressing spatial inequality, creating economies of scale, and reflecting the love of Christ by serving vulnerable populations (Andrews et al., 2021). By reducing spatial disparities, micropayments can empower marginalized communities and enable their participation in the digital economy. Furthermore, the system fosters entrepreneurship and innovation by lowering barriers to entry for small businesses and content creators. Emphasizing ethical practices and user-centric approaches, the micropayment system aligns with Christian values and promotes a more inclusive, compassionate, and economically equitable society.

Research Supporting Micropayments

While the concept of micropayments has been explored and discussed for many years, the implementation and success of micropayment systems have varied. Conducting a pilot program could help further demonstrate the efficacy of a specific micropayment system in a controlled environment. A pilot program could involve a select group of users and content creators, collecting data on user behavior, revenue generation, and overall satisfaction. Empirical evidence from a pilot program would provide valuable insights into the feasibility and potential benefits of implementing a micropayment system on a larger scale (Matin et al., 2002).

Micropayments have emerged as a promising solution for monetizing digital content that poses challenges for traditional means of monetization. Traditional payment systems often incur high transaction costs, making charging small amounts for individual articles, downloads, or access to specific features impractical. In contrast, micropayments offer a more granular payment structure, enabling users to pay for content in small increments and aligning costs with the value they perceive in the content (Lichtfous et al., 2018).

Research has shown that micropayments can enhance economic efficiency by reducing transaction costs associated with traditional payment systems. This cost reduction occurs through streamlining the payment process, making it easier and more cost-effective for users to access and pay for digital content (Lietaer, 2001). This increased efficiency benefits both content creators and consumers. For content creators, micropayments encourage purchasing individual items or features that may not justify a larger subscription or one-time payment, resulting in a more sustainable revenue model. For consumers, micropayments provide a flexible payment option that allows them to pay for specific content items without the burden of long-term commitments or large upfront payments.

The potential of micropayments to generate revenue is particularly relevant in industries such as journalism, music, and online gaming (Lietaer, 2001, 2013). By offering the option to pay for small increments of value, micropayments bridge the gap between free content and costly subscriptions, attracting a broader range of users who may be more willing to engage with content if they can pay for it in small, affordable amounts. This flexibility in payment options creates new revenue streams by capturing revenue from users who might not have opted for more extensive payment options.

Micropayments also offer an improved user experience by simplifying the payment process and reducing barriers to entry. Research suggests that the ease and simplicity of micropayments enhance user engagement and conversion rates. Unlike traditional payment methods like credit cards or subscriptions, micropayments provide a frictionless transaction process. This convenience encourages users to make spontaneous purchases and explore content they may not have considered, with more cumbersome payment options (Mkhatrishvili & Boonstra, 2022). By eliminating the need for lengthy sign-up processes or commitments, micropayments offer users a hassle-free way to access and pay for desired content or features, increasing user satisfaction and engagement.

Furthermore, micropayments provide an alternative monetization model that reduces reliance on traditional advertising-based revenue models (Matin et al., 2002). By offering a direct payment option, content creators can decrease their dependence on advertisements and potentially provide ad-free experiences. This is particularly attractive to users who value privacy and a cleaner experience. Micropayments empower content creators to focus on creating high-quality content that truly resonates with their audience rather than prioritizing content to attract advertisers. This can lead to a more engaging and authentic user experience, as content is tailored to meet the expectations and interests of the audience rather than advertisers.

For users who value privacy, micropayments offer an attractive option. By paying directly for content, users can avoid the data collection and tracking that often accompany free ad-supported platforms. This aligns with the growing trend of users seeking greater control over their personal information and a more private online experience (Donovan, 2012). Micropayments allow users to support content creators directly while maintaining their privacy and enjoying a cleaner user experience free from targeted advertisements.

Research has shown a market for ad-free experiences and a willingness among users to pay for content they value (Buschow & Wellbrock, 2019). A study by the Reuters Institute for the Study of Journalism found that a significant percentage of news consumers are willing to pay for news content to avoid advertisements. This suggests a demand for micropayments as an alternative monetization model that allows users to access content without the intrusion of ads.

Integrating micropayments and Central Bank Digital Currencies (CBDCs) can provide new opportunities for developing a viable remittance system, particularly for migrants. Remittances refer to the transfer of money by migrants to their home countries, often for the financial support of their families and communities. With CBDCs, micropayments can facilitate more efficient, secure, and cost-effective remittance services (Ambrosius et al., 2020).

Micropayments offer a more efficient and cost-effective way for migrants to send money through remittance systems (Bersch et al., 2021). Traditional remittance channels often involve high transaction costs, including fees charged by intermediaries such as banks or money transfer operators. Micropayments enable migrants to send smaller increments of money at a lower cost, reducing the financial burden of transferring funds. This can make remittance services more accessible to a broader range of migrants, especially those sending smaller amounts of money more frequently.

Furthermore, micropayments and CBDCs create opportunities for migrants to earn and transfer funds innovatively. Many migrants engage in various online activities, such as content creation, freelancing, or participating in the gig economy. Micropayments allow migrants to monetize their skills and receive direct payments for their work without relying solely on traditional employment or remittance services (Bersch et al., 2021). This gives them greater financial independence and the ability to send money back home in smaller increments as they earn it.

The integration of micropayments and CBDCs in the remittance space offers several benefits. Firstly, it reduces the reliance on intermediaries and the associated fees, making remittance services more affordable and accessible to migrants. Smaller, more frequent payments through micropayments align with the income patterns and financial realities of many migrants, allowing them to send money home in a way that suits their circumstances (Naderi, 2021).

Additionally, the seamless and user-friendly nature of micropayments enhances the overall remittance experience for migrants (Lee & Low, 2018). It simplifies the process, reducing the friction and complexity often associated with traditional remittance methods. Migrants can easily make micropayments through user-friendly digital platforms or mobile applications, eliminating the need for extensive paperwork or complex procedures.

The integration of micropayments and CBDCs also addresses the issue of financial inclusion for migrants. In many cases, migrants may not have access to traditional banking services or face challenges opening and maintaining bank accounts. Micropayments and CBDCs offer an alternative, digital-based solution that can reach even the unbanked or underbanked populations. This empowers migrants to participate more fully in the formal financial system and facilitates economic integration into their host and home countries (Mkhatrishvili & Boonstra, 2022).

Furthermore, micropayments and CBDCs enable migrants to support their families and communities more effectively (Bhaskar & Chuen, 2015). The ability to send smaller, regular payments allows for more immediate financial assistance and greater flexibility in meeting the specific needs of recipients. This can contribute to poverty reduction, improved living standards, and economic development in the migrants’ home countries. Moreover, the alternative monetization models provided by micropayments can enable migrants to earn and transfer funds innovatively (Metzger et al., 2019). Many migrants engage in various online activities, such as content creation, freelancing, or participating in the gig economy. Micropayments allow migrants to monetize their skills and receive direct payments for their work without relying solely on traditional employment or remittance services. This gives them greater financial independence and the ability to send money back home in smaller increments as they earn it.

In conclusion, the research supporting micropayments and their alternative monetization models aligns with developing a viable remittance system using CBDCs (Bhaskar & Chuen, 2015). Micropayments offer an efficient, cost-effective, and user-friendly way for migrants to send money back home, reducing transaction costs and increasing accessibility. By leveraging the potential of CBDCs, micropayments can be seamlessly integrated into the remittance process, ensuring secure and real-time transfers (Pocher & Veneris, 2022). This combination creates new opportunities for migrants, enabling them to earn and transfer funds in innovative ways and contribute to the economic development of their home countries.

Central Bank Digital Currencies (CBDCs) can significantly facilitate remittance micropayments (Bhaskar & Chuen, 2015). CBDCs are digital currencies issued by central banks, offering a secure and efficient payment infrastructure. With the integration of micropayment capabilities, CBDCs can enable migrants to send smaller amounts of money in real-time directly to their families or communities in their home countries. CBDCs can provide a trusted and transparent platform for remittance transactions, reducing costs and increasing the speed and security of transfers.

The research supporting micropayments and the development of CBDCs can pave the way for a more inclusive and accessible remittance system (Bindseil & Pantelopoulos, 2022). By leveraging the benefits of micropayments, such as reduced transaction costs, enhanced user experience (Pocher & Veneris, 2022), and alternative monetization models, CBDC-based remittance systems can offer new opportunities for migrants. These systems can empower migrants to send money more efficiently, earn income through micro-scale transactions, and contribute to the economic development of their home countries.

It is important to note that successfully implementing a viable remittance system based on micropayments and CBDCs requires careful consideration of regulatory frameworks, cross-border interoperability, and financial inclusion. However, research supporting micropayments provides valuable insights into the potential benefits and feasibility of such systems (Blakstad & Allen, 2018). Through continued research and pilot programs, the integration of micropayments and CBDCs in remittance systems can unlock new opportunities for migrants, facilitating faster, more affordable, and more inclusive financial services for individuals and communities around the world (Tronnier et al., 2023).

Feasible Mechanism for Promotion

Promoting the proposed micropayment system to relevant officials requires an intricate approach combining research-based evidence with strategic communication and lobbying efforts. Here are essential steps to consider:

  1. Policy Paper: Develop a comprehensive policy paper that clearly outlines the benefits of the proposed system, backed by empirical data from the research conducted. This paper should explain how the micropayment system works, its potential economic impact, and the issues it seeks to address. It should also provide an analysis of potential challenges and regulatory considerations.
  2. Meetings and Presentations: Request meetings with key policymakers, officials in financial regulatory bodies, and lawmakers in the U.S. and the targeted South and Central American countries. During these meetings, present the policy paper, elaborate on the concept, and discuss the potential benefits and implementation strategies of the micropayment system.
  3. Stakeholder Engagement: Collaborate with relevant stakeholders such as migrant worker unions, financial institutions, fintech companies, and non-profit organizations advocating for migrant rights. Their support can significantly influence policymakers’ decisions and provide valuable insights to improve the proposed system.
  4. Public Advocacy: Utilize media platforms to generate public awareness and support for the micropayment system. Publishing op-eds, giving interviews, and using social media can help explain the concept to the public, which can pressure policymakers to act.
  5. Pilot Program: Propose a pilot program for the micropayment system in a selected area. Successful implementation and positive results from the pilot can serve as a robust proof-of-concept to persuade skeptical officials.
  6. Legislative Proposals: Work with sympathetic lawmakers to draft legislative proposals that would facilitate the introduction and operation of the micropayment system. This could involve proposals for regulatory adjustments or establishing a legal framework that supports such financial innovations.

By using these mechanisms, the proposal for the micropayment system can be effectively promoted to relevant officials in a manner that underscores its potential benefits and addresses potential concerns.


In conclusion, the evolving global remittance landscape is at a critical juncture, primed to embrace the transformative potential of micropayment systems (Bhaskar & Chuen, 2015). Leveraging digital technologies, particularly blockchain, Central Bank Digital Currencies (CBDCs), and Bitcoin SV (BSV), these systems promise to address prevailing challenges in remittance, such as high transaction costs, slow transfer speeds, and lack of financial inclusion for migrant workers (Naderi, 2021).

Our examination considered how deploying a sophisticated CBDC-based Bitcoin wallet for micropayments could transform this space (Matin et al., 2002). Such a wallet, supporting various currencies, boasting low transaction costs, and complying with regulatory standards, could provide an efficient and secure remittance platform. In doing so, it can improve the financial welfare of migrant workers and contribute positively to the economies of their home countries.

Beyond its direct users, the micropayment system also holds broader implications for economic geography, fostering regional economic integration, stimulating economic infrastructure, and challenging existing core-periphery dynamics. Bringing remittance services closer to people in regions with a high concentration of migrant workers can reduce spatial inequality and promote economic diversification (Karlan et al., 2014).

However, developing such a wallet system is not without its challenges. It requires careful consideration, from digital identity verification and multi-currency support to user-friendly interface design and robust security measures. Overcoming these challenges and designing a wallet that meets the diverse needs of users is a significant undertaking. Still, the potential benefits are substantial, promising a more inclusive, efficient, and equitable global remittance landscape (Mukherjee & Sood, 2020).

The road ahead, filled with potential developments and opportunities, is exciting. It invites us to reimagine the global remittance landscape and harness the power of digital technologies to build more inclusive financial systems. Ultimately, these developments should contribute to the economic empowerment of migrant workers, who play a crucial role in our global economy.


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Cover Letter

Dr Craig Wright

[Your Address]

[City, State, ZIP Code]

[Email Address]

[Phone Number]


[Recipient’s Name]

[Recipient’s Position]

[Organization’s Name]

[Organization’s Address]

[City, State, ZIP Code]

Dear [Recipient’s Name],


I propose implementing a micropayment system to facilitate remittances for migrant workers moving from Central and South America to the United States. As an avid researcher and advocate for economic empowerment, I have carefully examined the current challenges in the remittance landscape and have identified an opportunity to address inefficiencies and foster a more equitable economic environment.

The existing remittance methods often involve high transaction fees, significantly diminishing the value of money sent to families in the workers’ home countries. The proposed micropayment system aims to tackle this issue by offering a more cost-effective and streamlined remittance solution explicitly tailored to the needs of migrant workers in this corridor.

The research presented in this proposal considers the physical and human geographical features of the regions involved and the current political climate that shapes financial regulations and policies impacting remittances. Drawing upon economic geography concepts such as spatial interaction, agglomeration, and economic diversification, this proposal seeks to reduce spatial inequality, stimulate regional economic integration, and serve vulnerable populations, reflecting Christ’s love in our pursuit of economic justice.

The micropayment system is not merely an economic innovation but also a service-oriented initiative that champions fairness and justice by promoting the welfare of migrant workers. In this proposal, I outline a comprehensive mechanism to promote the proposed system to relevant officials, encompassing policy papers, stakeholder engagement, public advocacy, and legislative proposals. By weaving together the threads of economics, geography, politics, and Christian principles, this study uniquely contributes to the discourse on financial systems for migrant remittances.

The economic activity we propose in this paper centers around introducing a micropayment system designed explicitly for migrant workers residing in the United States from Central and South America. Our proposed system aims to revolutionize the remittance process by offering a cost-effective and efficient means of transferring small-value amounts without incurring hefty fees. By maximizing the financial resources that reach the families of migrant workers, we seek to elevate their economic welfare and contribute to the economies of their home countries.

The micropayment system aligns with key economic geography concepts, including spatial interaction and regional economic integration. Moreover, it reflects Kenneth Arrow’s concept of resource allocation by fostering a more efficient and equitable distribution of resources among migrant workers and their families. We believe that this system will not only spur creativity, innovation, and economic growth within the migrant community but also contribute to the broader socio-economic development of their home countries in Central and South America.

This proposal aims to elucidate the potential of the micropayment system and substantiate its proposed benefits with empirical and theoretical evidence. It addresses essential research questions, such as how the system can improve the efficiency of remittances and what socio-economic impacts it may have on the migrants and their home countries. Through this research, we aspire to contribute to the discourse on improving financial systems for migrant remittances, bearing significant implications for economic policy, financial technology innovations, and the livelihoods of migrant workers and their families.

I believe that this proposal holds immense potential for transforming the remittance landscape and improving the lives of migrant workers and their families. I would be honored to discuss this proposal further and explore opportunities for collaboration. Thank you for considering this proposal, and I look forward to the possibility of working together to make a positive impact on the lives of migrant workers and their communities.


Dr Craig Wright

Additional Material

The World Bank’s database of 2012 remittance flows (Fig 1), as referenced in Kiersz (2014), provides valuable information on the volume and patterns of remittances during 2012. The World Bank is known for its comprehensive collection of remittance data, widely recognized and utilized by researchers, policymakers, and organizations worldwide. The database likely includes data on remittance flows between countries and regions, offering insights into the top sending and receiving countries and the magnitude of remittance transfers. This information is valuable for understanding global remittance trends and their socio-economic implications. It’s important to note that as the data is from 2012, more recent information should be consulted for up-to-date analyzes and decision-making.

Figure 1           World Bank’s database of 2012 remittance flows  (Kiersz, 2014)

The data from the World Bank, which was used in The Guardian’s interactive guide (Rogers, 2013) to remittances, provides information on where people send their money home (Fig 2). This data allows for a comprehensive understanding of the destinations of remittances globally. The interactive guide, visualized by Guardian graphic artist Paul Scruton, likely presents the data in a visually engaging format, allowing users to explore and analyze the patterns and trends of remittance flows. Users can gain insights into the countries and regions receiving remittances by clicking on the image or interacting with the visualisations. This data can be utilized to understand the economic dynamics and the impact of remittances on various nations and communities worldwide.

Figure 2 Where the Money Goes (Rogers, 2013).

Finally, the Migration Policy Institute (MPI, 2013) provides an informative tool that displays data on the top 25 destinations of international migrants (Fig 3). This tool offers insights into the number and share of international migrants, categorized by gender, for these destination countries from 1960 onwards. It’s important to note that the definition of international migrants may vary across countries, as governments collect statistics differently. The data primarily rely on official statistics on the foreign-born population, encompassing individuals born outside their current country of residence. However, the estimated number of noncitizens is utilized for countries lacking data on place of birth but having information on citizenship. The dataset includes refugees, although some may not be foreign-born.

            Figure 3 Migration and Remittance Flows (MPI, 2013)

The information is sourced from population censuses, registers, and surveys. Changes in countries’ geographical and political boundaries over time can impact the size of total and international migrant populations and country rankings. For instance, the dissolution of the Soviet Union altered the classification of individuals who were previously considered internal migrants but are now counted as international migrants due to changed political boundaries. The provided data excludes countries with total populations of less than 2,000. The United Nations Department of Economic and Social Affairs, Population Division, is the source of this data, specifically the International Migrant Stock 2020 report. This report offers comprehensive information on international migrant stock by sex, region, and destination country from 1990 to 2020. The provided link (MPI, 2013) can be visited for further access to the specific data, noting that data from before 1990 is no longer available online.

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