Blockchain combined with cross-border payment: the next blue ocean in the cross-border market?
There are more and more scenarios for cross-border payment in global trade, we are now facing many issues in cross-border payments such as high commission charge and complicated transaction process. Applying blockchain technology to cross-border payments can help us in solving many problems.
Characteristics of Blockchain
This is one of the most competitive features of the blockchain. It can not only get rid of some centralized control, but also reduce the intermediary cost.
At present, most cyber crimes are caused by the staff of the centralized organization tampering with the database. In the world of blockchains, many nodes maintain the records of transactions together, it means that it’s quite difficult to tamper with the data of a certain node. The more nodes that are maintained, the more impossible it is to tamper with the data.
3. Low cost
McKinsey estimates that the application of blockchain technology in the B2B cross-border payment and settlement field will reduce the cost per transaction from US$26 (23€) to US$15 (13€).
4. Non-stop service
Blockchain data can support 24/7 trading, this technology can bring convenience and timeliness of transactions. The blockchain’s own characteristics determine its huge commercial value in the cross-border payment field.
1. Reduce cross-border payment costs
Blockchain peer-to-peer (p2p) mode no longer relies on traditional intermediaries to provide credit certificates and billing services. Any financial institution can use its own network access system to realize (p2p) payment information transmission between payees and payers.
2. Trading guarantee
The distributed system architecture of the blockchain network doesn’t have a central node. Therefore, each node on the network spontaneously conducts transactions and accounting on the basis of the necessary protocols. Blockchain technology can ensure greater stability, reliability and business continuity for cross-border payment services.
The traceability of the blockchain ensures that all trading activities can be tracked and queried, reducing the regulatory costs of cross-border payment transactions.
4. Improve transaction efficiency
The current cross-border payment service needs to be reviewed according to a series of policies, which takes a long time. Combined with blockchain technology, it can increase the automation of transactions and improve transaction efficiency.
Overall, blockchain combined with cross-border payments can reduce costs while increasing efficiency, it provides third-party payments with more possibilities in Cross-border e-commerce trade.