Moving money across borders is still too slow, too expensive, and too opaque. The G20’s own program to fix cross-border payments sets blunt targets for 2027: 75% of retail and remittance payments should arrive within one hour and average remittance costs should head toward 3% (with no corridor above 5%). We’re not there yet.
The size of the problem
Remittances are a lifeline for hundreds of millions of families. The World Bank estimates officially recorded flows to low and middle income countries reached $656B in 2023, and despite macro headwinds are forecast to approach $690B in 2025. In several major economies, 2024 set new records (e.g., Mexico at $64.7B; the Philippines at $38.34B). Yet the global average cost of sending money still sits near 6.5%, more than double the UN/SDG and G20 ambitions. Every percentage point shaved off fees puts billions of dollars back into households.
What “broken” looks like inside real corridors
The World Bank’s Remittance Prices Worldwide database lays bare the inconsistencies customers face in the same corridor and amount. Consider just a few:
- United States to Philippines (US$200-$500, Feb 2025): total cost ranges from ≈1.2–2.4% with low-cost digital providers to 10–21% with high-fee agents and banks (fees plus FX spread). RPW’s own “Total Average” for Q1 shows 4.78%, but individual services reach more than 20% on small tickets.
- Singapore to Philippines: digital options dip below 1% total cost (e.g., ~0.73%), while others climb above 5% for the same amount. That gap is largely hidden in FX margins, not just explicit fees as per Remittance Prices Worldwide website states.
These are mature, high-traffic corridors. In long-tail routes especially where cash payout or USD passthrough is common costs and delays are often worse.
Why the status quo struggles
Traditional cross-border rails splice together correspondent banks, closed remittance networks, batch FX desks, and manual compliance reviews. That fragmentation produces:
- High take-rates: layered fees + FX spread. The RPW team now also tracks a “SmaRT” (Smart Remitter Target) benchmark“what a well-informed consumer could pay” which is still above 3% globally.
- Uncertain speed & transparency: delivery can vary from minutes to days; disclosures are non-standard and incomplete. G20 monitoring shows progress, but many markets remain short of the one-hour availability target.
Lightning as a payments rail, not a speculation bet
The Lightning Network is a layer-2 on top of Bitcoin that moves value instantly with final settlement once channels rebalance on-chain. In 2023, routed Lightning payments were estimated at 6.6 million in August alone (a 1,212% increase vs. 2021), with 99.7% payment success on River’s enterprise nodes and an average ticket around $12 micropayment territory that legacy rails don’t serve efficiently.
Institutional adoption has followed: large U.S. exchanges, including Coinbase, integrated Lightning specifically to enable fast, low-cost BTC transfers, an essential backend capability that consumer apps can abstract behind familiar fiat experiences.
What changes when you route over Lightning?
- Cost becomes network-native: Lightning routing fees are tiny and competitive (measured in parts-per-million and satoshis), rather than percentage-of-principal. Providers can price remittances closer to network + compliance + FX actuals, not legacy rack rates.
- Speed is real-time: funds are available to the recipient service effectively instantly, helping the industry meet the one-hour availability target far more consistently across corridors.
- FX is modular: convert fiat to BTC (Lightning) back to fiat at the edges where markets are deepest and avoid stacked spreads mid-corridor. That’s where partner selection, treasury, and liquidity design matter.
Corridor snapshots: how Lightning helps
U.S. to Philippines: RPW shows a wide spread from ~1–2% to 10%+ for the same $200-$500 amounts. A Lightning-enabled flow lets a U.S. app convert USD to BTC (on exchange), send over Lightning in seconds, and cash out BTC to PHP locally often netting a sub-3% all-in price even after KYC/AML, exchange spreads, and payouts, especially for digital account credit and higher-frequency senders.
Singapore to Philippines: Best-in-class digital services already hit <1% total cost for some tickets. Lightning helps standardize that experience and extend it to more providers and payout types, cutting reliance on expensive correspondent or agent networks.
What about capacity headlines?
You may have seen stories about Lightning’s public channel capacity declining ~20% in 2025. Capacity is only a partial signal; private and unannounced channels aren’t visible, and enterprise adoption often routes through custodial nodes. The more relevant indicators for a payments rail throughput, success rates, and merchant/fintech integrations remain strong and trending up.
Building on Lightning without exposing users to BTC volatility
End-users don’t need to hold bitcoin to benefit from Lightning. A modern flow looks like this:
- Sender funds in local fiat.
- App converts to BTC momentarily, routes over Lightning.
- Recipient service converts to local fiat and credits a bank account, e-wallet, or cashout partner.
FX and compliance live at the edges, where you already KYC and screen. The “bitcoin” bit is just the neutral, settlement layer that replaces hops across correspondent banks. (This architecture is exactly why large, regulated platforms have added Lightning.)
Where Neutron comes in
Neutron provides the connective tissue so institutions, banks, and neobanks can add Lightning-powered remittances without reinventing the stack:
- API-first Lightning access: abstracted channel management, liquidity, and routing.
- Fiat on/off-ramps & payout partners: plug regional banks, e-wallets, and cash networks.
- Compliance tooling: KYC/AML screening, travel-rule-ready messaging, and reporting.
- Treasury controls: FX orchestration to minimize slippage and keep quoted prices tight.
For a regional money transfer operator serving, say, Singapore to Philippines, Neutron’s model turns Lightning into a drop-in settlement rail. The outcome isn’t theoretical: you quote a transparent margin over real FX, deliver near-instant credit, and push your average price toward (or under) 3%, even on smaller tickets, while protecting your own unit economics.
