Blockchain-based payments to be boosting cross-border remittance – A whole new way of payment system

Hundreds of billions are transferred across the border by different businesses and individuals. According to the best blockchain development company in Kolkata, the blockchain-based payment system could literally boost cross-border remittance in a totally different way. Blockchain will be benefitting the entire payment system across borders and the money transfers are going to witness a huge annual growth in the next decade.

According to ITSpectrum Solutions, a leading blockchain service provider in the industry, remittance is basically a transfer of money which can be either done by individuals residing in other countries or even by the cross-border businesses helping them transfer money across the globe. Particularly in developing countries remittance is a lifeline for the people living in different parts of the globe.

What are blockchain-based payments and cross-border remittances?

Blockchain is a whole new technology used by several industries or individuals across the globe which helps in removing multiple intermediaries when it comes to making cross-border payments or money transfers. Using this technology now money can be transferred directly using the blockchain network which works via blockchain from one bank to another. As depicted by the best blockchain development company in Kolkata, using this new way of money transfer eliminates the need to go through two different banks and contrarily reduces the time and cost of the transaction process.

When talking about cross-border remittance it is basically a form of fund transfer and transaction process where the funds are transferred or moved from one bank account to another with the same or a different banking body. In cross-border payment the banks or the individuals participating in the money transfer process work in tandem in order to transfer the funds. During a cross-border money transfer process, the merchant’s bank receives the remitted amount which will be finally settled into the merchant’s account.

As depicted by ITSpectrum Solutions, in the current market place there are several leading money transfer giants who have been working into this billion-dollar market in order to offer smooth cross-border remittance to the general public. Having a vast network has helped the companies provide service to the people and help them transfer money in the remotest location. However, there are certain problems that need to be sorted such as –

•    Having high fees – Even with the advent of the latest technologies remittance payment system is still out of reach of many people. According to market statistics, it was found that on average there has been an increase of only 7-9% for every money transfer. The money transfer fees are inclusive of the charges taken from both the sender and the receiver.

•    Very slow transfer process – As of now cross-border money transfer takes a lot of time and could even take over 2-5 days to complete the entire process. There have been cases where the time limit exceeded its required time in order to be transferred to the recipient’s account.

•    Involvement of multiple intermediaries – In the payment process involvement f intermediaries or third parties does add up to the cost and time required to complete the money transfer. This is a major issue and is depriving people of cross-border payment services and driving them to a less secure and unregulated means of money transfer.

What is the potential of blockchain technology in helping the remittance process?

According to the best blockchain development company in Kolkata, blockchain technology does have the potential to make the money transfer process fast, secure, and transparent. The best thing about this technology is that it can literally help in reducing the overall costs involved in providing remittance services. With the elimination of intermediaries, blockchain can speed up the money transfer process and simplify international payments simply by maintaining the security standards and making it more cost-effective at the same time.

As mentioned earlier there were only 7-9% cross-border payments taking place across the globe but with the application of blockchain technology, the transaction costs have reduced drastically which has helped in reducing the risk of losses that might happen due to fluctuating currencies.

Considering the current market scenario, it can be said that blockchain technology is the fast emerging solution when it comes to cross border remittance and even offers fast and cost-effective money transfers as well. However, the technology does have the required potential but still, there are certain hurdles that have to trespass before a revolution in the remittance industry.