If you’ve ever sent money to your friends and family abroad or bought something from an international seller, you’d be familiar with the process of cross-border payment mechanisms stated Bahaa Abdul Hadi. You would also know it is a complicated process most of the time as the traditional banking system is quite slow and expensive to make money transfers. Fortunately, mobile payment methods are expanding to international territory.
The latest advancement in the global payments’ ecosystem is using decentralized identity technologies such as the blockchain to safely transact with an individual, business or government entity across borders. This has thrown open the field of domestic finance to global entities and bridged the gaps left by outdated banking solutions.
Cross-border payments market on the rise
The sector of international transactions is currently proliferating and expected to reach nearly $300 trillion in the next 6 years. It is now more essential than ever for businesses to ensure they are using the latest payment solutions to target their tech-savvy Gen Z consumers. There are several pros to employing blockchain for the purpose of cross-border transactions.
They are an effective alternative for those who want to make quick hassle-free payments. They operate round the clock with less transaction fees and immediate transfers. It may be tedious for people in developing countries to approach traditional banking systems but anyone with a smartphone and data can access decentralized cross-border payments.
Advantages in using decentralized payments
There are many reasons why using blockchain-based tech in international payments will soon become popular everywhere. Crypto wallets are already accepted as payment in many fast food chains, cab services and so on. Decentralized tech make it possible to anonymously conduct transactions in a transparent setting. It uses a high level of data encryption and provides more security than existing modes of payments. As there is no central authority monitoring information, we can rise above all the obstacles we faced via conventional money transfers.
Challenges in cross-border payment solutions
Some businesses are hesitant to adopt decentralized technologies as they are prone to some unpredictability. The public might also resist its mainstream use as many still prefer using their tried-and-tested banking approaches to sending money abroad. A certain level of technological awareness is required to handle decentralized identity systems.
Though there is always a certain degree of risk associated with exchange of information online, technologies are being improved every single day. One can remain hopeful that the benefits of using decentralized tech in the arena of global finance will be welcomed by more countries in the next decade. Policies and legislations are also being framed by governments around the world for recognizing and controlling the latest developments in fintech. Thank you for your interest in Bahaa Abdul Hadi blogs. For more information, please visit www.bahaaabdulhadi.com.
