Crypto Transforms How Businesses Process International Payments

The recent proliferation of e-Wallets and payment platforms has driven increased online purchases, and money is now flowing around the globe at unprecedented levels. By 2027, the value of cross-border payments is expected to reach $250 trillion.

For users and entities such as small and medium businesses (SMBs), this has been transformative. The move away from physical money, combined with the ability to purchase online and internationally, has seen a boom in cross-border purchases. But problems remain due to the legacy infrastructure still required to make transactions.

For users and entities such as small and medium businesses (SMBs), this has been transformative. The move away from physical money, combined with the ability to purchase online and internationally, has seen a boom in cross-border purchases. But problems remain due to the legacy infrastructure still required to make transactions.

Fintech is providing solutions, but underlying problems remain

With the increasing ubiquity of smartphones, fintech has provided multiple solutions for making cashless transactions. Digital wallets, for example, can be connected to payment platforms or banks and are soaring in popularity. For instance, in Australia, e-Wallet use rose 90% between March 2020 and March 2021, becoming more popular than contactless payments.

One significant advantage for small businesses and consumers is that markets have been able to expand abroad. In 2020, the number of real-time transactions rose 41%, from 50 billion to 70.3 billion. Many of these are cross-border e-commerce transactions, which rose 17% last year, despite a drop in trade.

Due to the vast and rising amounts of international trade – global payments revenue is predicted to grow from $1.9 trillion to $2.5 trillion in 2025 – the G20 has made cross-border payments a priority. They identified four primary issues – cost, speed, transparency, and access.

These are complex issues and result from legacy infrastructure. The latter, transparency, is particularly problematic for SMBs. Large businesses have solutions for international payments, and fintech has several options for P2P transactions. But small businesses have been left behind. SMBs who fall under the required thresholds for trading volume are stuck with slow, expensive, and non-transparent payments.

However, fintech is coming up with new solutions and innovative platforms to help SMBs expand abroad.

Discarding traditional infrastructure solves a lot of issues

A great example of a fintech company taking a new approach is XanPool and its platform XanPay. XanPool’s CEO and founder is cryptocurrency entrepreneur Jeffery Liu. He wanted to design a way to solve the problems created by relying on legacy platforms and structures, such as Visa, SWIFT, and banking networks.

Liu explains how XanPool and XanPay solve traditional problems. “We created XanPool to make onboarding and offboarding from fiat currency to cryptocurrency a lot easier. Because legacy infrastructure was created before the internet, it is no longer fit for purpose and was causing a lot of pain. It can sometimes take a week or more to make a transfer, there are foreign exchange charges and a standard merchant fee of 3%, and there’s no transparency.”

With a background and in-depth knowledge of blockchain technology and cryptocurrencies, Liu built a platform that operates outside the limitations inherent with traditional structures. XanPool has created automated market-making software that allows buyers and sellers – liquidity providers – to buy and sell crypto using bank accounts or e-wallets. The liquidity providers are essentially a fiat gateway, and they make up the XanPool network.

Source:bitcoinist.com