In this post, I am going to discuss with you the impact of blockchain technology in cross-border payments.
Infact, this is one of the spaces that blockchain technology is currently disrupting massively.
So, if you want a secure, cheaper, quicker cross-border payment experience then you will love this new post.
Let's get started…
Introduction
Cross-border payments are one of the earliest crypto use cases for obvious reasons.
This technology driven world has influenced every aspect of our lives. Technology has the ability to bend, break, and link the world.
With blockchain technology we bend, break, the existing system, and link the world more seamlessly through cheaper, faster, and quicker cross-border transaction of funds.
Blockchain can have a huge impact on how cross-border payments are conducted and potentially reshaping the entire financial infrastructure of countries.
The Problems of Legacy Systems
Many of the issues with traditional cross-border payments stems from the high number of intermediaries involved in processing a transaction.
Each additional intermediary drives up the processing fees, increases the number of failure points, and adds to the risks of fraud.
SWIFT, the international payments messaging network that connects the transacting institutions in international payments is notoriously slow and subject to security breaches.
Since SWIFT established a common standard for financial transactions and a shared banking network in1973, it has connected more than 11,000 financial institutions in more than 200 countries and territories.
Facilitating cross-border payments and supporting economic development around the world.
The system however is archaic, inefficient, unreliable, and costly.
For example, an average international payment takes 3-5 days and 4% of payments using SWIFT right now fails.
This leads to a lot of frustration for businesses and their customers especially in a globalized e-commerce era where every second counts.
Antiquated Systems Favor Big Banks
The world of traditional foreign exchange (FX) has been in a state of doldrums for years.
You can only make payments during regular banking hours, and while messages are sent via SWIFT, payments aren't actually settled until a few days later.
Cross-border transfers remain one of the most inconvenient consumer transactions plagued with long processing time, notoriously exorbitant fees, and lack of transparency.
Blockchain - The Holy Grail of Cross-border Payments
The advent of blockchain solutions in the cross-border payments space is good news.
Blockchain technology in cross-border payment can enable secure and swift transfer of funds.
This will allow you to bypass banking intermediaries who serve as middleman and help transfer money from one bank to another.
The transaction is cheaper, quicker, secure, and has end visibility anywhere in the world.
With blockchain, institutions can communicate information about a payment between each other in real time, and settle the payment instantly with no failures.
All this is done with lower transaction fees as well. Simply put, blockchain technology improves the cross-border payments experience for all.
According to a research by Juniper Research, the use of blockchain in cross-border payments will save global banks $10bn in 2030.
The technology will also greatly improve payments transparency and traceability.
Players Entering the Market
A lot of new crypto start-ups are entering the blockchain-powered cross-border payments market.
Sendlify is a notable example of a fintech company emerging in the space with their Sendl token and QuickSend payment service.
Sendlify is a cross border money transfer and crypto marketplace empowering world-wide payments with its $Sendl token.
The platform makes it easy, and swift to send and receive any form of cryptocurrency and fiat instantly.
Sendlify leverages blockchain to reduce transaction time and to service emergency transactions fast.
It uses Sendlify algorithmic stable coin as a layer of payment settlement.
Using the digitally distributed ledger technology they eliminate daily limits, and increase transaction volume to improve scalability.
Sendlify aims to enable cross border transfers on it's platform at the lowest cost, making it one of the cheapest cross-border payment services in the payment industry.
The Sendlify platform features a p2p message encryption system that uses cryptography to store users data against hacks and loss of users credentials.
Conclusion
The future is bright for blockchain solutions in the cross-border payments space.
You will now be able to enjoy faster, more reliable, and secure international money transfers all thanks to the blockchain technology.
There you have it, my thoughts on the impact of blockchain in the cross-border payments industry.
I really hope you enjoyed my post. Are you going to make your next cross-border transaction using Sendlify?
Please let me know by leaving a quick comment below.
