Blockchain tech to alter cross-border payments

The term, ‘cross-border payments’, refers to transactions across different countries. Cross-border payments are important for individuals, businesses, industries and international development organizations. However, cross-border transactions often become difficult because of exorbitant fees and long processing time. Use of blockchain in cross-border payments will make the entire process simpler and also boost the global economy.

Blockchain, or distributed ledger technology, is a game-changer move in cross-border money transfer. With encryption technology, the payment process becomes faster. Currently, many blockchain-based payment platforms exist and many more will appear in the coming days. In this article, we will discuss the existing cross-border payment system and how blockchain technology makes it faster and more efficient. We will also evaluate the major changes that are about to come and the future of blockchain in cross-border payments.

Global economy of cross-border payments 

The global cross-border payments will reach US $156 trillion by end-2022. According to Juniper Research, just B2B cross-border payments will be a $35-trillion economy by end-2022. And, with growing technology, cross-border payments with distributed ledger technology are increasing. A World Bank report says the average cost of remittances is around 7% and G20 countries have been trying to lower cross-border remittances to 5%. Such countries as North America, Latin America, Asia and Africa are the new trendsetters in cross-border payments.

Traditional cross-border payments system

Different global messaging systems operate traditional international transactions and are connected by a banking network. A remittance transfer is a cross-border monetary transaction by a company that associates with banks, credit unions, or financial services institutions.
In traditional cross-border payment, the ledger is not the same between the sender and receiver which adds security concern to the entire process.

Why is blockchain important?

First, immutability is not compromised in blockchain. Here, the centralized authority is replaced by a decentralized network. A group of nodes validates the monetary transaction. Second, in a blockchain network, a transaction gets completed in real time due to fewer negotiators. Many public blockchains can transfer money across the world. Finally, blockchain supports transparency and traceability. It solves the pain points of different industries. Basically, all transactions are done fast and with a minimum fee.

Features that distinguish blockchain technology

Blockchain technology in cross-border payments has an advantage for both sender and receiver. Some of its features are:

  • Non-tampered info: Information tampering is difficult because every block with information links it with the previous block
  • Real-time payment: This is a game-changer for businesses that need quick funds. Payment is instant with transaction information integrated into it
  • Decentralized: The flow of client information across different jurisdictions can be prevented
  • No intermediaries: The receiver has direct access to the payment with no delays, unnecessary fees, or remittances involved

How blockchain works

The key transaction parts are the gateway and the customer with no banking institution in between. A person in Delhi can send money to Italy using an on-ramp service provider. The provider converts the fiat money into cryptocurrency which can be kept in any crypto wallet. One can choose a cryptocurrency and open an account and then initiate a transfer from a bank or a credit card. Finally, one needs a receiver’s wallet address to send the amount. Once the cryptocurrency reaches the receiver’s wallet, he/she can convert it into fiat money.

Changes in blockchain-enabled cross-border payments

Mainstream financial companies have also started using blockchain to pilot transactions. The technology on the upper layer remains the same, but a little tweak in the core makes it work on blockchain. Now, government organizations are steadily deploying blockchain technology to manage financial settlements, enhance existing legal frameworks and grant disbursements.


The major challenge is that most people are still ill at ease with the technology. There is not much clarity regarding crypto market regulations. Fintech giants, such as Wise or SWIFT, are currently hesitant to use blockchain or distributed ledger technology. They will deploy blockchain networks when more central banks adopt it for cross-border payments.



Views expressed above are the author’s own.


  • It’s really basic: VP’s right on judiciary’s overreach but SC’s basic structure doctrine must stay, it’s good for robust democracy

  • History writing: Scholars stepping in where professionals fear to tread

  • Reimagine Republic Day with less guns, more Gandhian approach

  • Appointments, disappointments: Is the wrong person appointed a judge? Is the right person rejected? Here’s what some judges say

  • Be wise, Centre & SC: Better than court’s stand & GoI’s proposal is revising the collegium’s memorandum of procedure

  • Old poison scheme: GoI must build a consensus against old pension system

  • The guvs are off: Governors in some opposition-ruled states are keeping bills pending for long, violating constitutional spirit

  • Mixed benches, please: Women, SCs, STs, OBCs & minorities are hugely underrepresented in higher judiciary. Correct this

  • Don’t judge views: Criticising govts can’t be a disqualification for judgeship

  • Remove Raj from Raj Bhawans: Governors are necessary. But as recent controversies like those in Tamil Nadu demonstrate, they must be made accountable to not just the Union but the state and Rajya Sabha as well

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top
%d bloggers like this: