Jonathan Low is the CEO & Founder of Biptap, world’s first OMNIBANK, providing users and companies access to full banking suites globally.
In today’s interconnected world, the ease of international commerce and financial transactions should be a given. However, it remains far from seamless. Cross-border payments are a complex and frequently inefficient process, characterized by regulatory obstacles, high fees and sluggish processing times.
Traditional banking systems, which were developed for a bygone era, are unable to keep up with the demands of the digital age. The limitations of these legacy systems become more evident as businesses expand their global reach and individuals attempt to send remittances across borders.
The Cost Of Borders
Fees imposed by banks and intermediaries are one of the most significant challenges faced by businesses. These fees, which are frequently woven into exchange rates and processing charges, can consume a significant portion of the transaction value, especially for smaller quantities.
Additionally, businesses may be adversely affected by the processing delays that are associated with cross-border payments. Delays in payment receipt can impede cash flow, disrupt supply chains and, in the end, inhibit growth.
The current solutions provided by conventional financial institutions can be overregulated and exorbitantly priced. Additionally, the regulatory environment can be labyrinthine, and banks and payment providers impose substantial fees, which can further complicate and delay the process, posing obstacles for emerging market enterprises and individuals.
One group that frequently faces the obstacles associated with cross-border remittance is individuals who have migrated to foreign countries and send money to their families back home. They may find it challenging to provide for their families due to high fees, slow processing periods and limited access to financial services. These challenges can have a far-reaching impact on the quality of life and overall well-being of families worldwide, in addition to financial hardship.
The global remittance market is a multitrillion-dollar industry. Nevertheless, many families and workers may find themselves burdened by the high costs of these transactions, which I’ve seen sometimes exceed 7% of the remitted amount.
A Vision For A Financial Future Without Borders
To resolve these fundamental issues that impede conventional cross-border transactions, businesses can leverage the capabilities of blockchain technology by:
• Reducing Fees: By using blockchain, businesses can decrease transaction costs by eliminating intermediaries and streamlining processes.
• Enhancing Processing Times: The pace of cross-border transactions can be accelerated by the near-instantaneous settlement of payments when using blockchain technology.
• Providing Transparent And Secure Transactions: The immutable ledger of the blockchain and smart contracts can guarantee transparency and security.
• Enhancing Accessibility: Businesses that implement blockchain can help individuals and enterprises worldwide engage in the global economy, irrespective of their financial status or location.
The Future
The pursuit of a genuinely borderless financial future is an ongoing process, but we must be dedicated to the changing requirements of our users. We can collectively influence the future of cross-border payments by cultivating partnerships with global financial institutions, regulatory agencies and technology providers.
The Effect On Businesses And Individuals
These solutions can offer advantages that surpass mere cost reductions and expedited processing times. By enabling individuals to send remittances more efficiently and affordably, we can eliminate barriers to cross-border transactions. Businesses can optimize their supply chains, access new markets and broaden their global reach.
I believe the demand for seamless cross-border financial transactions will continue to increase as the world becomes more interconnected. When we challenge the status quo and embrace innovation, we can establish a future in which financial barriers are obsolete.
By addressing these challenges and offering innovative solutions, we can unleash the full potential of global commerce and empower individuals and enterprises worldwide.
But this begs the question: What methods can industry leaders implement to resolve these issues with blockchain technology?
A Welcome Solution
Banking as a service (BaaS) has the potential to revolutionize the financial sector. Monopolies and overregulation can impede innovation and deny millions of businesses and individuals financial services. Consider the numbers: 1.4 billion people are unbanked. Those numbers show that banking institutions exclude a large percentage of the global economy. This exclusion limits their alternatives and can create uncertainty.
Overregulation can choke enterprises, notwithstanding good intentions. This can hurt struggling industries by slowing innovation, making high-risk businesses vulnerable to inefficient and risky financial solutions.
Implementing BaaS Into Your Practices
BaaS has the potential to revolutionize how businesses offer financial services, but only if applied correctly. First, leaders must be specific. Are you using it for payments, lending or compliance? I recommend choosing a scalable provider with strong APIs and built-in KYC/AML compliance. Customization—especially for customer-centric services—as well as security and data privacy should always be top priorities.
When integrating BaaS into your business processes, it’s important to start small. Focus on core services such as virtual accounts, payments, deposits or lending. From there, integrate APIs to streamline operations and deploy modularly so you can scale gradually. Be sure your design includes user-friendly experiences to drive adoption, and continuously monitor feedback to refine the product.
Or, find solutions that have pre-built the banking suite and address your needs, where you can plug and play into your business model. This may be a more desirable option for businesses unable to spend a huge amount of resources to build a banking system in your business.
Addressing Potential Challenges
Regulatory compliance across borders is complex, so partnering with experts can help you understand the landscape. Vendor dependency is another risk, so choose reliable providers. As you grow, scalability can become an issue, so plan infrastructure upgrades early. Legacy systems may require costly modernization, and strong data protection measures are nonnegotiable.
Approach BaaS with strategy and caution, and you’ll unlock transformative growth opportunities. Adaptation and foresight are your greatest allies.
Conclusion
We are witnessing a pivotal moment in history, marked by unprecedented shifts in global wealth and economic systems. In my opinion, this transformative period aligns with groundbreaking advancements in technology, the evolution of decentralized finance and the urgent call for innovation in cross-border systems.
The convergence of these forces is ushering in opportunities to reshape economies, empower industries and redefine financial inclusivity worldwide.
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