How blockchain is reshaping business transactions and consumer remittances

Blockchain technology has made significant progress in various areas, but it can be difficult to separate real-world applications from high promise. His two standout use cases for cryptocurrency, business transactions and consumer remittances, are beginning to demonstrate its transformative power.

Both sectors currently suffer from inefficiencies such as high fees and slow transfer times with current systems. Blockchain enables borderless transactions for as little as 1 cent and within seconds.

This is the power of cryptocurrency trading. For business payments, this will enable you to stream payments worldwide, increasing efficiency and reducing costs instantly.For consumer remittances, estimated 1.4B People all over the world today do not have bank accounts. Those who don’t suffer from high fees and slow settlement times. Remittances are a low-hanging fruit for blockchain that benefits those who need it most.

International Business: Leveraging Cryptocurrency Payments

The traditional financial system falls short in an increasingly borderless world. Foreign exchange fees, long transfer times and transaction fees are common issues.

International wire transfers can take up to five days, while cryptocurrencies like Ethereum settle transactions within seconds (12 seconds on average). Others settle even faster – Stellar within 2-5 seconds, Solana within 400 ms. This speed improves business flexibility and cash flow.

Blockchain networks have significantly lower transaction fees. Currently, the average price of Ethereum is around $20, which is acceptable for businesses. However, Ethereum scaling solutions such as Arbitrum and Polygon charge less than $0.10 per transaction. Some services, like Solana, let you pay for less than a cent.

Finally, businesses that accept card payments are typically charged a 2-3% transaction fee. Cryptocurrency payments eliminate such fees, making it easier, especially for businesses with high revenues or low profit margins.

All of these are readily available, and businesses will increasingly adopt these forms of payment over the next few years as a natural progression towards improving technology.

Consumer Remittances: A Boon for Global Migrants

Similarly, remittances, a necessity for many in developing countries, suffer from high fees and slow remittances. These issues make it cryptocurrency-friendly and significantly reduce fees and latency.

The World Bank estimates that average remittance fees for 2022 will be: 6.24%. This is partly because traditional money transfer services like Western Union frequently exceed the bill. 7% Over mid-market exchange rates. These costs have a significant impact when considering immigration quoted remittances, along with local bank charges. $800 billion This brings the estimated remittance fees to $49.9 billion. Blockchain-based payments could significantly reduce this. Currently, Ethereum faces high network fees, while many other networks are more affordable.

Crypto money transfers improve accessibility. Even though there are over 1.4 billion unbanked adults worldwide, two-thirds of them own a mobile phone. Cryptocurrency transfers will close this gap, allowing people without bank accounts to seamlessly receive funds.

Many blockchain partnerships are already rapidly forming to address these challenges.ripple recently partnered with Partner with MFS Africa to streamline real-time mobile payments.Jack Dorsey’s Company Block recently partnered with Leverage the African Exchange Yellow Card to enable payments from the US to be converted into local African currency. Stellar is a blockchain network focused on low-fee remittances to countries that need it most and are keen to build local partnerships and integrations.

Decentralized finance (DeFi) is also a viable solution. With DeFi, anyone with an internet connection can create an account on his popular DeFi network, where they have full control over their funds and can make near-instantaneous global transactions. Networks such as Ethereum, Tron and Binance Smart his chain are the most popular. For example, the Tron Network is already very popular in Africa due to its very low fees.

current barriers

Despite the enormous benefits, the introduction of cryptocurrency payments and transfers will take time. He has three key barriers to overcome.

1. Infrastructure: The party receiving the payment must be able to convert and spend the payment in their local currency. This requires bank consolidation, which can be a slow and cumbersome process.only the United States is over 4,800 commercial bank. It takes time to deploy these, and even more time to complete the necessary integrations.
2. Education: Many potential businesses and consumers are still uneducated or skeptical about cryptocurrencies and don’t know how to use them. This is especially true for unbanked consumers who stand to get the most out of cryptocurrency payments, but who otherwise may be vocal in favor of faster and cheaper solutions. Businesses are constantly exposed to new opportunities and must prioritize the deployment of resources.
3. Regulation: The US has taken unprecedented steps against large cryptocurrency exchanges and many are tired of getting involved in the field. In other countries, such as India, where citizens benefit greatly, governments are cracking down on the sector. Countries like Dubai are more supportive and we will see these countries make rapid progress in the coming years.

We will see progress over the coming months and years, but real change will take time.

Suppose a local vendor started accepting payments for goods and services in cryptocurrencies. In that case, the burden of finding a bank and payment partner to integrate becomes irrelevant as consumers no longer need to off-ramp to use their tokens. In this vein, Visa and Mastercard have quickly adopted blockchain technology to avoid the risk of irrelevance.

Predicting future trends: the resurgence of the blockchain market

Given current macroeconomic challenges such as high inflation and historical cyclical trends, the blockchain market could see a major resurgence in 2024 or 2025. Countries with favorable blockchain regulations are expected to lead the way during this period, attracting institutional investors and facilitating consumer adoption.

Blockchain payments and remittances are one of the areas with great growth potential as they bring overwhelming added value to society. This trend could drive infrastructure investment, raise consumer awareness, and put regulatory pressure on those who underestimate the undeniable benefits of blockchain technology.

We are still in the early stages of blockchain adoption, but incremental change will gradually pave the way for a transformative future.