“The traditional cross border payments are a cumbersome process and incur huge transaction fees making them a lesser case when compared to crypto transactions that provide instant transfer of payments across borders with a minimal fee.”
The Traditional Cross-border Payment System
The traditional cross-border payment system is a cumbersome process in which the payment is made through multiple intermediaries such as Banks and other financial institutions. The transaction needs to be approved by all the intermediaries to finally reach the account of the receiver and hence requires paying fees to all the intermediaries. As the money is transferred each intermediary keeps approving the transaction on its way and taking their cut along the way making it an expensive process as well. A traditional cross-border payment takes somewhere between 1 to 5 days to reach the destination.
Why Crypto Payments are a Better Way for Cross Border Payments
There are a number of advantages of crypto payments as a cross border payment method and they are discussed below:
Near Instant Transactions
The Crypto payments are near-instant and can reach the crypto wallets on the other side within minutes or even in seconds. The peer-to-peer nature of the crypto transactions makes it possible for cutting the intermediaries and resulting in a near instant transaction. This helps in saving time and to ensure that funds reach cross-border in times of emergency.
There are many peer-to-peer exchanges that charge very low fees for the crypto transactions and when the amount is considerable, crypto payments can help in saving several times more in fee savings than the traditional cross-border payments. The low fee mechanism helps in transferring even millions of dollars across the nations without losing on your hard earned money as would have been in the case of traditional payment systems.
The crypto payments provides a diversity in payments as there is a multitude of cryptocurrencies in the market and the sender can choose the best suited cryptocurrency for the transaction. This will ensure that the sent currency is the received currency and the conversion charges are also prevented.
There are no restrictions or capping on the amount of funds to transfer cross-border using crypto payments as the transaction is decentralized and no central authority is required for the approval of the transaction.
The blockchain network is termed as a highly secured network and as the crypto payments are made through a blockchain network, the payment will be highly secure and non-breachable. This ensures that even large amounts of payments can be made without worrying about any cyber theft.
Disclaimer: The article should not be considered as any financial advice. It is advisable to conduct thorough research before investment.
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