How Is Bitcoin Reshaping Cross-Border Payments?

With the rapid digitization and increase in internet penetration, the world is becoming smaller every day. Now, you can connect with anyone virtually in real-time with just a few taps, irrespective of their geographical location. However, sending payment to someone living abroad still takes a few days and can be very costly.

Blockchain can solve this problem with efficient routing and seamless cross-border payments. In this blog, we will explore cross-border payments, their current market share, the challenges faced by traditional banking systems, and how Blockchain is reshaping this landscape by simplifying and expediting international transactions.

Cross-border payments marketshare

The internet is blurring the boundaries between nations, thus creating ample opportunities for global trade. According to a report by DataHorizzon Research, the Cross Border Payments Market was estimated to be valued at USD 164.6 Trillion in 2022 and is expected to reach USD 361.9 Trillion by 2032 at a CAGR of 8.3%.

Statista projects that consumer-initiated cross-border payments will grow nearly twice as fast as their B2B counterparts between 2023 and 2030. According to a recent report by Mastercard, 81% of cross-border payment transactions involved money being sent to support friends and families abroad. International remittances have surged over 61% in just a year.

Despite the growing need, not much has been done to make global payments efficient and cost-effective. Let’s look at the current means of payment and their challenges.

Traditional payment methods and their challenges

Presently, bank transfers are the most common method for sending money abroad. For global trade, credit/debit cards have become a default means of payment. While both payment methods work, they are inefficient and extremely intricate. Let’s look at the challenges associated with the existing payment system:

• High processing cost

Several intermediaries are involved in international payments, and their processing costs compound at every step. In addition to this, conversion charges are applied to every transaction, making traditional payment methods inefficient and ridiculously expensive.

• Slow and sluggish transactions

Payments sent via traditional methods usually take 2-5 business days to settle in the receiver’s account. However, if any of the intermediaries involved in the transaction don’t approve it, the transaction can be delayed or canceled.

• Lack of transparency

Tracking an international transaction is a huge challenge for most people. Unlike domestic payments, there is no real-time tracking available for global transactions. This makes it difficult to verify whether the intended recipient has received the payment.

• Differences in payment systems

There is no standard payment system available for moving money internationally. Every country has its own payment system and protocols to ensure safety and security. Forcefitting one country’s payment protocols over another can lead to transaction failures.

• Varying currency values

Exchange rates make global transfers strenuous and expensive. Whenever you send money to a different country, it must be converted to the recipient’s currency, which can incur additional fees and unfavorable exchange rates.

• Inconsistencies in laws and regulations

International payments are subject to the rules and regulations of both the originating and receiving countries. Navigating through the intricate regulatory framework can be daunting and may halt or delay your payments.

Traditional payment channels like banks are ineffective and unfavorable for international transfers. No one wants to pay sky-high transaction fees to send a payment that will take days or weeks to reach the recipient — if everything checks out. Bitcoin can fix this. Let’s understand how.

Bitcoin + Speed — gateway to seamless cross-border payments

Speed Wallet is the fastest, easiest, and most reliable way to transfer Bitcoin to any part of the world. Here’s how Bitcoin and Speed can transform cross-border payments:

• Lower transaction fees

Being a decentralized currency, Bitcoin doesn’t need any intermediaries to moderate, manage, or approve transactions. This makes Bitcoin transactions up to 100% cheaper than traditional payment methods. For instance, if you transact via Speed Bitcoin Lightning Wallet, only a network fee will be applicable to your transaction, which is usually a tiny fraction of the payment. As such, there are no interchange fees or hidden charges for Speed transactions. Let’s compare a $100,000 transfer via different payment methods.

If you are sending $100,000 from the US to the UK via PayPal, here’s what you will pay in fees:

PayPal fee 5,708.29 GBP
Fixed fee 0.24 GBP
Variable fee 2,274.60 GBP
Cross-border fee 1,568.69 GBP
Exchange rate mark-up 1,864.77 GBP
Total 11,416.59 GBP

Now, if you send the same amount ($100,000) via
Speed Bitcoin Lightning Wallet, you will only pay approximately 4.61 GBP in fees. This means you will effectively save 11,411.98 GBP that would have been otherwise sent to payment gateways or banks to facilitate the transaction.

• Near-instant transactions

With Speed Bitcoin Lightning Wallet, you can send and receive Bitcoins to any part of the world almost instantly. And because Bitcoin is a decentralized currency, it can operate 24/7, facilitating seamless cross-border transactions. Last but not least, third parties or financial institutions have little to no influence over Blockchain transactions as they are direct and peer-to-peer. This means no one can ever halt or cancel your transaction once it is confirmed.

• Transparency & traceability

Every Bitcoin transaction can be traced back to its origin through Blockchain. While your real-world identity will always remain anonymous, users can still track all your transactions. This provides a high degree of transparency, helps payment reconciliation, and eases out record-keeping.

When you transact via Speed Bitcoin Lightning Wallet, you can track your payment in real-time. The receiver will receive a notification as soon as the transaction is confirmed. You can also view your transaction history and network fees right from the Speed Wallet app.

• Wider accessibility and global acceptance

Bitcoin is available worldwide, and so is Speed Wallet. With our dedicated mobile applications for Android and iOS and an intuitive Chrome extension, you can use Speed Wallet to send and receive payments from anywhere, anytime.

Whether you are buying local groceries or shopping online, Bitcoin is the most popular cryptocurrency accepted by thousands of businesses worldwide. Nowadays, you can even buy space travel tickets with Bitcoin, just like Tyler and Cameron Winklevoss did back in January 2014.

• Safe and fraud-proof

Frauds and payment failures are very common in international payments. After all, there are a lot of con artists, phishing websites, online scams that can redirect your funds to a different address or steal your payment information.

With Bitcoin, you can be assured that your funds will always remain safe. No one can initiate transactions on your behalf without your private key. Moreover, a payment once sent, cannot be reversed at any cost. This makes Bitcoin safe, secure, and fraud-proof for international transactions.

Final words

Bitcoin and Speed Wallet are like a match made in heaven. Together, they can transform cross-border transactions. By switching to Speed, you can not only save hundreds of thousands of dollars in transaction fees but also initiate near-instant transactions to any part of the world from your mobile phone.

Download Speed Bitcoin Lightning Wallet today to experience fast and secure transactions at your fingertips. With our reliable mobile applications and user-friendly web extension, you can access Speed Wallet via your preferred platform. Onboard Speed today and step into the future of cross-border payments.

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