BIYAPAY- What are the disadvantages of traditional cross border payment? How can we improve it?

The participants of cross-border payment market are mainly banks, remittance companies and online payment service providers.

Among them, banks mainly provide cross-border payment services in most of countries and regions through agents. Around 2016, remittance companies will account for about 5% and35% of the cross-border B2B and C2C markets. The above two categories belong to traditional cross-border payment service providers. Under the traditional cross-border payment mode, there are the following difficulties:

Price
The price of traditional cross-border remittance service providers is too high. Banks charge up to 2.5% for B2B transactions and 5% for C2C transactions according to the amount of transactions and destinations. In addition, the banks will collect payment fees, which may be passed on to customers.

Efficiency
Many banks need 2–5 days for international transfers. Most banks still need to operate cross-border payment manually, which makes the process slow and inefficient. Some banks still use paper forms and require customers to use physical banking services for transaction processes .

Transparency and Predictability
Traditional cross-border payment is difficult to track or time the funds. Because cross-border payment requires many banks to play different roles, it is difficult to evaluate and calculate the cost, resulting in the loss in the payment process and the lack of predictability and audibility for customers.

Complexity
With the continuous expansion of the internationalization of global enterprises, there are more and more bank accounts, and followed with more and more problems in the management and monitoring of these accounts.

For enterprises that are not used to cross-border payment, the traditional cross-border payment process is complex and unclear, and there are often many concerns of unclarity in cross-border payments, resulting in additional fees and delayed payments.

The rise of fin-tech companies
According to information collected and released by the Pew Research Center, immigrants from all over the world sent more than $570 billion to their home countries in 2016. Although until the beginning of last century, banks and a small number of foreign exchange brokers in the commercial street have been dominant in this field, the arrival of several financial technology companies has made the international remittance patterns better.

To say the least, the rapid growth of some financial technology overseas capital transfer companies is noteworthy. For example, Wise, a UK based financial technology Unicorn (worth more than $1 billion), is an international remittance company that has made a profit within six years of its operation. After emerging in the field of peer-to-peer (P2P) payment, it has entered the field of customer to customer (C2C).

Some of the leading financial technology companies have done a good job in attracting the attention of venture capitalists. Hong Kong based company , BIYAPAY has raised more than $5 million investments through the seed fund and the subsequent two rounds.

With a significant increase in alternatives, these fin-tech companies have brought some benefits to those who want to transfer their money overseas, and directly reduced dependence on banks.

Until the late 1990s, those who wanted to move their money overseas had no choices but to turn to banks or a limited number of foreign exchange brokers in the market. Although financial technology companies have not completely excluded banks, a considerable number of people still choose to leave banks and turn to professional overseas remittance companies.

Better exchange rate
Before financial technology companies entered this field, individuals, small and medium-sized enterprises usually have to accept less than ideal exchange rates. Only banks and large businesses keep interest rates close as the market secret. Today, fin-tech companies offer competitive exchange rates, usually close to the current market rates. For example, the exchange rate used by BIYAPAY is to provide services at the middle price of the exchange market, which gives these enterprise users more choices and greater advantages in using their services.

Efficiency
Most banks still need a few days to transfer funds overseas. However, BIYAPAY, a financial technology company, uses blockchain technology to process transfers much faster than traditional banks do. Remittances to an overseas bank account only takes minutes to couple of hours to arrive.

Multiple payment methods
Fin-tech remittance companies tend to provide customers with a variety of payment options. Payment by bank account transfer is usually the most cost-effective. At present, while the blockchain technology is being accepted by traditional banks and brought into the scope of research, BIYAPAY is already using blockchain technology for users to pay for goods to merchants and sellers in a variety of currencies all over the world, usually on the same day or the next day.

Online and mobile transfer
Financial technology has simplified the way and reduce time for people to initiate overseas capital transfers. By using Internet enabled computers or smart-phones, you can make cross-border fund transfers almost anytime, anywhere.

Multi currency account
The multi-currency accounts offered by financial technology companies like BIYAPAY is designed to serve online sellers, freelancers and small and medium-sized enterprises to be engaged in international transactions.
With a typical multi currency account, you can get the details of collection accounts from different countries for free, and BIYAPAY also provides a wallet account of cryptocurrency, which can support buyers to convert cryptocurrency into fiat currency in order to pay sellers in different countries. You can then receive payments in the matching currency without worrying about the exchange rate. For example, you may live in the United States, but you can still pay in Euro directly to your Euro account. In this case, it’s entirely up to you when you want to withdraw the funds to your local bank account.

Big data advantage
The use of big data can provide international remittance companies with the means to establish a better relationship with their target customers. For example, XOOM has used the services of industry experts to analyze the big data generated by its transactions. The system successfully detects an exception that may be missed. The case was in 2011, when a criminal syndicate tried to trade through a large number of New Jersey discovery cards.

Big data can also provide valuable insight for companies, such as reasons of people remit money, frequencies of transfers, locations, equipments and when.

Conclusion
These fin-tech companies have successfully broken the traditional way of international remittance, making cross-border remittance faster and more cost-effective than before. In addition, people can now send money overseas in their comfortable home, in the office, and even when traveling. However, another important thing is to compare different alternatives and choose a software that is more suitable for you to suit your personal needs.