How blockchain technology is fixing payments today and what comes next
- Blockchain technologies are connecting global financial systems so they are easily interoperable, efficient, affordable and accessible.
- This can reduce the cost and time of cross-border payments.
- Confidence in blockchain technologies are rising as more governments and businesses invest in these areas.
What's wrong with cross-border payments today?
It’s no secret that the cross-border payments landscape using traditional rails is fraught with fees, hurdles and delay. Individual senders incur outsized fees for the billions of dollars sent in personal remittances every year. Global businesses choose between bearing an FX cost or passing that cost onto their customers. And all of those involved must wait days or weeks to complete transactions. The bottom line: sending money via traditional rails is far from a borderless experience.
Part of the problem is that systems are not interoperable. To send money to different corners of the world without blockchain, a whole patchwork has been haphazardly knitted together over the decades to achieve some semblance of financial interoperability between financial institutions, correspondent banks and money transfer operators along the value chain. Connecting these disparate systems, particularly in underserved markets, where the local currency is not globally traded, has created friction that results in long delays and high fees at each link of this chain.