Rapid criticism from Bitcoin transfer companies

One of the well-known financial transaction news media, Swift, has been criticized for failing to meet the needs of financial markets around the world. There are some who believe that processing cross-border payments is inefficient because the processing of a transaction amount in real time cannot be managed and the payment status and settlement risk are not transparent.

Global Payments Innovation – A new initiative

In response to this criticism, Swift has launched Global Payments Innovation (& # 39; GPI & # 39;), which can be used to provide funds for B2B transfers that fall in the same time zone on the same day. It also offers secure transfer information, end-to-end payment tracking, and better transparency. The first phase of the project went live in January this year and is currently used by twelve banks, including ING, Danske Bank, Citi and Bank of China. The current focus is on B2B payments. Swift has again committed to expanding its cross-border payment system.

The effort to improve the global messaging service may be too little or too late to address global payment release, payment and settlement blocks, especially for non-banking customers.

"Bitcoin" money transfer company

Both new and old Bitcoin referrers are already working on solving these problems. They use various "blockchains" to transfer money around the world. Align Commerce is one of the "Bitcoin" money transfer companies that became famous for $ 20.25 million funding. & # 39; Marwan Forzley & # 39;, CEO of Align Commerce, looks at distributed accounts and & # 39; blockchain & # 39; as an opportunity for the next generation.

Cross-border payments in the global financial chain

These payments totaled approximately $ 26 trillion in 2014, which is approximately 33 percent of global GDP. Due to the inconsistent and non-standardized infrastructure, the money remains trapped in today's system. For cross-border payments, a customer must find a sender to manage the money transfer. The sender can transfer payments based on its contacts with financial institutions in the home and recipient countries. In addition, each institution has its own intermediary, which increases the complexity of the process. Each bank involved in managing the transfer charges its own service fee. It can take seven days to complete an operation.

The corporate sector around the world was estimated at $ 15.7 trillion in 2014. You can negotiate fees between 1 and 2 percent of the payment amount. Small and medium-sized companies. Transactions from person to person can be charged up to 15%. The hidden costs of these transactions make it difficult for customers who cannot afford it.

If a customer belongs to an under or undeserved part of the world, they may not be able to find the paths that facilitate simplified cross-border payments, such as: B. by using the services of a transnational bank for the transfer via its infrastructure.

Efforts by "Bitcoin" referral companies

Although Swift is committed to creating transparency in cross-border payments through GPI, it has not been able to provide relief to customers who cannot negotiate fees. On the other hand, Bitcoin transfer companies have made efforts to solve this problem on a small scale. These companies enable customers to conduct cross-border transactions at low and controlled costs.

One of the largest "Bitcoin" money transfer companies, "Bitspark", is based in Hong Kong. Despite a lack of traction, the company sees the best long-term prospects. The company's CEO, George Harrap, said:

"The vast majority of global transfers are not made through banks, but through money transfer transactions. This does not affect how you manage your business or transactions. In any case, the costs remain the same as for batch payments from transfer companies. Therefore, transfer fee reductions may not impact companies that transfer $ 10 million per transfer and use this balance for small transfers."

The problem is still there

Despite Swift's intention to improve the recording of payment transactions for its member institutions around the world, it is possible that innovations by & # 39; GPI & # 39; are inspired to show up in other & # 39; Blockchain & # 39; -applicable applications. For example, the HyperLedger project (a project Swift is involved in) could lay the foundation for cross-border frameworks in the future.

ZipZap's CEO, Alan Safahi, raised $ 1.1 million in 2014 to extend his cash to the Bitcoin service. According to him

"& # 39;ZipZap uses a combination of traditional (Swift) bank payment rails and blockchain technologies to find the most cost-effective and efficient transfer option. The Swift & # 39; GPI & # 39; is primarily intended for B2B payments, so it has no impact on & # 39; ZipZap & # 39; s current business flow."

The Ripple mentions that the introduction of "GPI" was more of a step to remain relevant than a step towards modernization.

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