Traditional cross-border remittance processes can be cumbersome due to high exchange rates, numerous intermediaries, and extended processing times. With each intermediary involved, fees accumulate, making the process not only costly but also significantly delayed.
In contrast, banking as a service eliminates the need for multiple intermediaries by leveraging decentralized networks. This makes it faster, more affordable, and more secure for international payments.
Cross-Border Payment Solutions: Faster and More Cost-Effective
Beyond slow processing and high costs, traditional cross-border remittance methods present additional challenges for users.
In conventional banking, multiple intermediaries complicate real-time tracking of payments, which is especially inconvenient for globally operating businesses, as delays and uncertainties can cause operational setbacks.
Cross-border compliance adds further complexity, with varying regulations, authorities, and requirements in each country. These regulatory differences increase both costs and processing times, as each country enforces unique rules for money transfers.
Additionally, inconsistent banking infrastructure across regions can make payment processing challenging. Sending money to less-banked areas is often hindered by underdeveloped infrastructure. Communication gaps or incompatible banking systems create delays and make it harder for financial institutions to participate in global transactions.
How Does Crypto Cross-Border Remittance Work?
Compared to SWIFT, a widely-used cross-border payment solution, crypto remittance is both faster and more cost-effective. This approach is especially useful for sending and receiving international payments in underbanked regions.
Here’s how crypto remittance works:
1. The sender converts their fiat currency into a chosen cryptocurrency via a crypto exchange.
2. The sender then transfers the crypto assets to the recipient’s wallet.
3. The recipient can either convert the cryptocurrency into local fiat currency or, if possible, spend it directly with a crypto debit card.
This method allows users to send funds internationally without losing 3%-5% to fees or waiting days for the transaction to clear.
Because cryptocurrency operates on a decentralized network, it avoids the extra steps and costs imposed by intermediaries, making transactions fast and low-cost. With this decentralized system, crypto payment processing is nearly instant, with transactions completed in minutes rather than days.