Alternative Finances

Align Commerce Testing Global Blockchain Payments

Bitcoin’s blockchain technology may have found a new application: cutting the time and cost required by cross-border wire-transfer payments. Align Commerce has launched a public beta test of a system to let either businesses or individuals pay invoices globally, the company announced on Thursday (April 2).

And in a sign that Align understands clearly how most businesses feel about new technology, the bitcoin and blockchain pieces are all under the covers. All the sender and receiver deal with is money in their respective currencies.

“Businesses spend over $50 billion on wire and foreign exchange fees, wait up to seven days for transactions to complete, and have no visibility into the process,” Align Commerce CEO Marwan Forzley said in a prepared statement. “The blockchain offers a ready alternative. The Align Commerce Payments Platform is the first in the industry to use this global rail to help small and medium-sized businesses quickly collect and receive payments in their local currency while avoiding high wire fees and various hidden fees.”

The process is relatively straightforward: The individual or business paying an invoice sets up Align Commerce as the payee for a bank transfer in local currency. Align uses a bitcoin exchange to convert the payment into bitcoins, then transfers the bitcoins to a bitcoin exchange local to the business receiving the payment, where it’s converted to the local currency, which is sent on to Align, which deposits the amount into the recipient’s bank, less a 1.9 percent fee, according to Forbes.

By comparison, a standard wire transfer involves more paperwork, more time as payments move between correspondent banks communicating through the SWIFT payments-messaging network, and an uncertain cost, because banks on both ends will profit from the foreign-exchange spread as well as charging for the transfer itself. It’s also never clear exactly where in the process a payment is under the conventional system.

Align’s system allows visibility into the transfer and cuts the time from as much as a week to one to three days, Forzley said. Most of the time is used in transferring funds into and out of banks to feed into the bitcoin rails.

“You can get the funds transferred essentially in real time. That’s one of the key things about this technology — the speed of it is superior,” Forzley told Market Platform Dynamics CEO Karen Webster in an interview last month. “If you look at the payments systems around the world, they are all mainly built as a domestic vehicle. The interesting thing about the blockchain is that there is no concept of domestic payment.”

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