Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Hawala

en.wikipedia.org

Post reply on HN
Print view View original

21–30 of 57 posts

Re: Hawala

#21

Post by wmf »

diziet wrote: post #14

One important thing to know is that in islamic banking, interest or anything that exploits time value of money is considered usury, and is haraam (sinful). There exists a whole institution of islamic banking compliant with shariah law. From gift giving for usage of money such as hibah to good will repayment of debt such as qardul hassan where the debtor may repay more than the principal amount, islamic banking seeks…

It's hard for me to escape the feeling that Islamic banking replaces usury with hypocrisy, but I guess high-context Cultures could probably make the same argument in reverse.

Re: Hawala

#22

Post by bane »

I've heard this system compared to the old Renaissance Medici double entry banking system. It's possible that Italian bankers learned about this system and saw it as more secure than moving boxes of money and valuables around thus establishing the foundations of modern banking.

http://en.wikipedia.org/wiki/Medici_Bank

It's also pretty much how Western Union works.

Re: Hawala

#24

Post by xerophtye »

This system is commonly implemented in Pakistan by a Service called "Easy Paisa" (translated: Easy Money). Where you can just deposit money at a certified corner store with your National ID card and password. and then the recipient can get it from their own corner store. The strength here is the ubiquity of the service. it's everywhere! And when i say everywhere, i mean even in rural areas! There ads actually build on the ability of the breadwinner of the family, working in the city, to send money to his family back in the village.

Recently, another major use is small businesses which operate as FB pages, collect money from customers using this and then send the goods. Convenient for both sides, as you avoid the hassle of depositing money in banks, or the risk of a badly implemented Online Credit Card system.

Re: Hawala

#26

Post by helpfulElf »

cup wrote: post #12

I work for quite a big Hawala system (www.bakaal.com.au) and were thinking about implementing bitcoins. Moving through the legislation is the biggest stumbling block.

Email?

Re: Hawala

#27

Post by htmcer »

nl wrote: post #7

I almost linked to this, too, in the "Western Union says Bitcoin is not ready for international transfer" discussion[1]. The interesting thing about Hawala is that it provides a ready source of liquidity in local currencies. If someone was to link the two (ie, a local Hawala agent accepted a Bitcoin transfer from an untrusted source, and then moved the money via the trusted Hawala network) then almost all the problem…

Hawala and other informal networks are accounted for 40% of the remittances sent every year.[1] USD 534 billion were sent in 2012 via formal networks.

Analyzing the remittances flow and their impact in the receiving countries (often more in term of %GDP than official intl development aid), it's a shame that the global average fee to "remit" is 9% and up to 12% while sending money towards Sub-Saharan Africa. [2]

But that's a fast moving market with several technological and business model innovations (and some YC startups too.

This last years, we have seen a lot of startups with interesting ideas based on new technologies or new business model to improve the remittances market: Azimo (http://azimo.com), Xoom (https://www.xoom.com/), Regalii (https://www.regalii.com/ - send good instead of cash, YC), Transferwise (http://transferwise.com) and new technology like mobile banking (M-Pesa, MTNMMO) and bitcoin (buttercoin YC - http://buttercoin.com/).

Disclaimer: I work on TawiPay (http://tawipay.com) as a side-project, a comparison website for remittances services.

[1] http://www.scribd.com/doc/150342765/Trends-in-Remittances-Ju...

[2]https://remittanceprices.worldbank.org/sites/default/files/R...

Re: Hawala

#28

Post by micheljansen »

Transferwise operates a very similar model for currency exchange: you send them Dollars to convert to Euros and they match you to people who need the opposite. I guess their model is a bit different in that the exchange only happens once a second party is found, but I think a peer to peer system makes even more sense when converting between currencies, as there is literally no way to turn actual Pound Sterling into Euros, so physical transfer is out of the question.

Re: Hawala

#29

Post by nhaehnle »

marshray wrote: post #15

I don't see how this is so different than our usual Western banking system, except that it's less regulated and more customer-friendly.

I have no idea why you were down-voted. I think you're right.

For example: The Wikipedia article claims that the Hawala system is unusual in that no promissory notes are exchanged. However, directly after that, the article explains how extensive notes are kept on how much the brokers owe each other, and that there are some forms of final settlement between brokers. These notes on mutual indebtedness appear to play an identical role to promissory notes.

This is really no different than the final settlement between banks in the Western system, except that - as you wrote - it appears to be less regulated.

Re: Hawala

#30

Post by joosters »

wmf wrote: post #21
diziet wrote: post #14

One important thing to know is that in islamic banking, interest or anything that exploits time value of money is considered usury, and is haraam (sinful). There exists a whole institution of islamic banking compliant with shariah law. From gift giving for usage of money such as hibah to good will repayment of debt such as qardul hassan where the debtor may repay more than the principal amount, islamic banking seeks…

It's hard for me to escape the feeling that Islamic banking replaces usury with hypocrisy, but I guess high-context Cultures could probably make the same argument in reverse.

Not sure that it is very different from Christianity and many other religions who banned charging interest, but then changed their minds/their definition of usury. The wikipedia page makes an interesting read:

https://en.wikipedia.org/wiki/Usury

Post reply on HN