Cross-Border Payment Efforts Look To Blockchain And Beyond

It may seem that cross-border payments were in the … well … crosshairs this past week, with a number of country-by-country and company-by-company initiatives using blockchain and other methods to speed payments and lower fees.

In Myanmar, Shwe Rural & Urban Development Bank has partnered with Krung Thai Bank, which is state-owned, to debut a cross-border transfer money offering that is in turn tied to the Ethereum blockchain.

As reported by Ledger Insights, the effort will initially facilitate transfers between Thailand and Myanmar, allowing Myanmar migrants working in Thailand to send money back to their home country, while saving money amid favorable exchange rates.

The transfers will be done across the Everex smartphone wallet platform, according to the report. Everex, which traces its genesis to 2016, has focused on distributed ledger technology for cross-border payments. The company has initially focused on catering underserved populations in Asia, but has also applied for a license in the United States. The firm said it is one of the first within its space to comply with know your customer and anti-money laundering mandates across Thailand and Myanmar.

Separately, in other company news, Canadian FinTech Buckzy Payments announced its launch earlier this week, eyeing international payments through what it has termed a “safe, secure and convenient ecosystem.”

The company said it facilitates international payments, with funds reaching recipients in less than five minutes. During the second quarter, the company will enable payments to more than 14 countries spanning the U.S., Canada and Asia.

Separately, Bill.com, in addition to securing $88 million in financing, has launched a partnership with Mastercard to speed up accounts payable for joint business customers. Bill.com noted it has three million customers in place and manages $60 billion annually in payments volume.

“Businesses struggle with conventional payment processes, which are complex, manual, paper-based and not always secure,” said Bill.com CEO and Founder René Lacerte in a statement. “Our cloud payment platform is changing all that. We automate payments and back-office business processes, resulting in significant efficiencies and cost savings.” The collaboration ties together virtual card technology with the Bill.com platform to help smooth and speed invoice payments.

A Larger Stage

Beyond individual company news, some seeming validation has come from the World Bank for Ripple’s xRapid and other technologies, including SWIFT’s blockchain pilots, as noted earlier this week. The theme, according to a blog post co-authored by Rodrigo Mejia-Ricart, research and public policy analyst at the United Nations; Camilo Tellez, head of research and innovation at the Better than Cash Alliance; and Marco Nicoli, senior financial sector specialist at the World Bank said B2B transactions are at present “slow and opaque” as they rely on third parties to help facilitate payments.

“These shortcomings make the cross-border payment industry ripe for disruption and innovation. Some see distributed ledger technologies (DLT) as having the potential to drive industry-wide change. Indeed, B2B cross-border payments, traditionally characterized by fragmentation and opacity, are a potential use case for the successful implementation of DLT,” said the authors in their post.

In reference to costs, the average global remittance (overall) cost stood at 7 percent as of Q4 2018 – 4 percent higher than the 3 percent target set in the Sustainable Development Goals for 2030. Blockchain (or DLT), said the authors, can lower costs and improve transparency, in part by eliminating the need for a correspondent banking relationship.

By way of concrete examples, the authors cited xRapid. Through pilots, according to Ripple, costs have been reduced on FX by as much as 40 percent to 70 percent. SWIFT also has an ongoing distributed ledger proof of concept. As reported for the SWIFT proof of concept, the messaging network said earlier this year the endeavor would look to trial a gateway that links trade and eCommerce to gpi. That comes as SWIFT is working with R3’s blockchain platform, Corda.

“Whether DLT will be an effective solution to the challenges the remittances industry faces, and when the technology will reach sufficient scale to effectively disrupt this space, remain to be answered,” the authors said in the World Bank post. “In any case, there is ample opportunity – and, of course, need – for innovation in the cross-border payment industry.”