Blockchain Tech Can Facilitate Cross-Border Payments
Cross-border B2B payments can be challenging, with regulatory differences, language barriers and high global money transfer costs.
Regulatory differences increase transaction and negotiation execution times, leading to increased operational costs, Tranglo CEO Jacky Lee said PYMNTS.
Language barriers can cause key points to be lost in translation. Companies should therefore consider whether they should support multiple languages.
High global remittance costs – with fees averaging 6.3%, according to World Bank data cited by Lee – exist due to the complexity of routing and central intermediaries.
Tranglo has the experience to meet these challenges. Founded in 2008, the company helps financial institutions (FIs) and businesses pay globally with Tranglo Connect, its proprietary cross-border payments solution.
In addition to the challenges, the company sees these opportunities, Lee said: “High potential in enterprise payments in terms of unleashing the global trade and cross-border B2B payments industry through the use of blockchain technology to more transparency, security and speed”.
Performing a full cost-benefit analysis
Tranglo now supports cross-border B2B payments in 25 countries, including several in Asia, Africa and South America, as well as Australia, Russia and Turkey. When there is significant demand from current partners for a certain corridor, the company performs a comprehensive cost-benefit analysis.
“The few things we typically pay attention to before committing: existing infrastructure and regulatory support, the risk appetite involved, any short or long-term plans that may affect our operations, and sufficient demand from end consumers,” Lee said.
Typically, a business will seek assistance from Tranglo, as it finds it time-consuming and costly to have to negotiate commercial terms as well as service specifications with respective payment partners for each market or corridor in which it wish to enter.
Additionally, each payment partner also requires businesses to pre-fund with them, which limits working capital, and without a single partner to streamline and choose the best payment option for each transaction, payments can typically take days to complete. be received.
“Tranglo’s unique connection to a vast network enables companies to enter markets quickly,” said Lee. “Integration with the RippleNet network and Tranglo payment solutions allows them to move funds faster and more cost-effectively compared to existing banking rails.”
Aim to penetrate the European and Middle Eastern remittance markets
Lee added that Tranglo customers can pre-fund Tranglo using Ripple’s On-Demand Liquidity (ODL) solution, maximizing cash flow and working capital.
“ODL, the new cross-border solution, was launched in September, first on the Philippine corridor and then on our other corridors,” Lee said.
Citing another achievement from last year, Lee said Tranglo exceeded its total processing value target in 2021 with a 26% year-over-year increase.
Looking ahead, Lee said Tranglo plans to continue expanding its new cross-border solution and entering new markets.
“We call it the year of ODL,” Lee said. “We are also aiming to enter the remittance markets in Europe and the Middle East.”