Cross-border commerce is an often ignored financial problem facing billions of people worldwide. Sky-high fees, long transaction times and lack of choice can drive consumers and businesses to distraction. As a result, many existing companies exploit these inefficiencies, eating into the budgets of hardworking people.
Roughly 1.7 billion adults are underbanked, with cross-border remittances averaging 7% in fees. With $600+bn exchanged every year (up to 10% of GDP for some countries) the problem of cross-border payments needs to be addressed.
A growing number of fintech companies have taken aim at the incumbent financial institutions that are holding back progress. TransferWise, WorldRemit and others have dramatically slashed the inflated costs associated with remittances. Despite the progress, many of these financial technology solutions still rely on outdated legacy technologies.
We’re left with a ‘better, but not great’ financial reality with millions of people sidelined by this band aid approach. Luckily, fresh Fintech companies are launching exciting payment solutions on top of state-of-the-art blockchain technology.
One advantage that cryptocurrency technology has over more traditional legacy payment architecture is the bespoke nature of blockchain consensus. These networks have been built from the ground up for one purpose, the efficient exchange and validation of ledger information. Blockchain allows the secure transferring of digital money, anywhere in the world with just an internet connection.
The Stellar network has evolved to address this very use case. By leveraging a novel federated byzantine consensus protocol (SCP), transaction costs and confirmations are extremely efficient. Base-level transaction fees average fractions of a cent, with transfers taking 3-5 seconds.
And that’s not all. The nature of Stellar’s blockchain allows for the tokenization of any asset – digital or physical – to be represented on the network. As a result, it supports automatic path payments between any two assets; creating unlimited value exchange potential between participants. US dollars instantly turn into Mexican Pesos, Japanese Yen, or anything else.
Transforming Global Commerce
Technology leaps are all well and good, but like the internet, they are useless without applications. Enter MobiePay – a universal payments and rewards ecosystem looking to transform global commerce. Leveraging the Stellar network, MobiePay in being built to allow anyone with a mobile phone to spend or send cash and digital currencies, anywhere in the world. To address the growing consumer demands for digital payments, the company is developing three complimentary ecosystems.
Intended to give consumers access to a suite of blockchain-leveraging consumer facing wallet and banking products. Mobie is in the process of integrating with thousands of point of sale systems at hundreds of retailers. An insured checking and savings accounts, as well as a debit card, should help drive mass-adoption. The magic doesn’t stop there. Peer-to-peer payments on the Mobie platform are being developed to allow users to send and receive both fiat and digital currency denominations, globally, in seconds.
To complement the suite of consumer wallet and banking applications, MobieX is being built to expand on the functionality of digital assets and trading. Stellar’s payment functionality enables both digital and fiat swaps in seconds. As a result, cross-border remittances should benefit from access to the mobile wallet and efficient currency exchange functionality. Staking rewards are also being set up for user distribution based on the amount of MobieCoin held by wallets.
Last but not least, MobiePay – this product is meant for the merchant gateways and settlement ecosystem and should substantially reduce payment processing fees. User friendly, loyalty programs are also being developed, giving merchants the ability to set up custom rewards systems. Other planned benefits will include; direct marketing and promotion functionality and mass send, or payroll to anyone worldwide.