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The answer to this question could be summed up into 3 main reasons— safety, borderless, and low transaction fees.
These are just some of the most cited reasons why the world is moving towards bitcoin for cross-border payments. In fact, According to Statista, the number of B2B cross-border transactions around the world is expected to increase dramatically in the next couple of years.
By the year 2025, the amount of B2B cross-border blockchain transactions will have reached 745 million. The second most active region in terms of blockchain transactions was Europe, where the number of transactions is expected to reach 466 million by 2025.
Before we go into more detail about these reasons, let's in a little more detail about what exactly cross-border payments are. Next, we’ll delve into these three reasons and then finish off with how StashWave is the crypto payment solution you’ve been looking for!
Cross-border Payments Explained
Because of the various advantages that come with embracing Bitcoin as a cross-border payment option, businesses all over the world are starting to accept Bitcoin payments. Following Tesla's recent announcement that it will take Bitcoin as payment for its cars, many more companies will decide to join them in utilizing Bitcoin payments.
Assume you are in Spain and wish to send money to Africa. The first step is to exchange fiat currency for a cryptocurrency of your choice. There are numerous websites and platforms that act as an "on-ramp," allowing purchases to be made via money orders and credit cards.
This bitcoin can be kept safe in a wallet. When it's time to send money to your buddies, they can provide you with the address for their wallet, which is similar to the account number you'd get at a traditional bank. Because these addresses can include hundreds of characters, careful transcription is required.
When monies are received in an account, the beneficiary has numerous options. They could either convert the cryptocurrency to fiat and withdraw it or not.
Bitcoin Is Coming To Cross-border Payments
Since its creation, cryptocurrency has been utilized for transactions in some form or another, and in recent years, an increasing number of businesses have concentrated on using it to enable payments. This includes cross-border transactions, with companies like worldwide crypto payments provider BitPay claiming its fast speed and low friction as important advantages over more conventional methods.
However, with the exception of a few outliers, digital entrepreneurs and challengers have embraced bitcoin while conventional payment companies have remained cautious of the technology.
11 Ways Bitcoin Helps With Cross-border Payments
Adding a Bitcoin or other cryptocurrency option when looking to make cross-border payments— be it online shopping or sending remittances— can be a great idea. For the sake of this section, let's assume that you run an online store. Check out some ways you’ll be benefiting from this cross-border payment option.
Low Transaction Fees
Fees are something to consider when choosing a payment method to send money across borders. This is irrespective of online shopping or sending money to your family back home. All services and goods provided by small enterprises are subject to taxes and levies. The lower your payment, the higher your margin.
When you use bitcoin or cryptocurrency as a payment option, you pay substantially fewer transaction fees. For all transactions, we anticipate a 3% credit card/debit card/PayPal commission. You would get an average of 1% with bitcoin, which is quite impressive. You can even obtain bitcoin for free. There will be no commission, middleman, or third-party involved.
What better strategy to enhance your sales than to broaden your target market to the entire world? When you begin sending money across borders, your prospective customer base grows exponentially. This international openness provides you with numerous additional options to promote your items.
When you accept bitcoin payments, you avoid dealing with currency rates and conversion expenses. Bitcoin is a global currency. It is available to everyone on the earth. And bitcoin has already become more than a passing fad. Crypto and blockchain ventures are being launched in all established and emerging economies. Perhaps Bitcoin is the most widely-known one.
Bitcoin is already owned by 22% of the world's population. Nothing appears to be significant, yet 5% of 7.7 billion people is massive (385M people). If you begin accepting new clients, it reflects your prospective new customers.
Let's continue the example of an online store. Identity theft is more than just a business problem. It is also a significant issue for your clients. The blockchain infrastructure and cryptographic security facilitate Bitcoin payment.
There is no more secure way to share information today. Consumers can experience completely safe payment while maintaining full control over their resources and privacy. What a relief for your customers to see that they may pay using the most secure technology available today, bitcoin.
Stay Ahead Of the Curve
Businesses are increasingly accepting bitcoin. Microsoft, Expedia, and Starbucks are big players, but so are coffee shops around the block from your house. If you want to stay technologically ahead of your competitors, you should not pass up the opportunity to take bitcoin.
Cryptocurrencies account for a significant portion of project debuts in the FinTech area (financial and technology combined). They are regarded as the financial industry's future. Promote to your customers that you take bitcoin and transform your business image into a modern and cutting-edge company.
Be Your Own Bank
Accepting bitcoin allows you to enter an altogether new universe. You have the ability to be your own bank. Except for yourself, you have no one to answer to. Freedom is there outside your door. You may pay, transact, invest or trade any amount without needing the approval of anyone. Of course, you'll still need enough bitcoin to purchase whatever you desire.
A Faster And Cheaper Option
The short amount of time required to integrate bitcoin payments into your website is another benefit. Any WordPress plugin can quickly and easily incorporate crypto payment into your website.
The integration process might just take a few hours, even if you don't own a WordPress website. This is great news if you know it could take two or three weeks to receive credit card acceptance for your website.
Dealing with chargebacks, which are customer-filed objections on credit card transactions, can be incredibly taxing and cause firms to lose a significant amount of income. Businesses lose millions of dollars a year due to chargeback charges after becoming victims of credit card disputes.
According to a Mastercard report, there will be 615 million chargebacks worldwide in 2021, and by 2023, there will be 409 million chargebacks filed in the US alone. Since banks or other financial institutions do not facilitate the use of cryptocurrencies, there is no one with whom the cardholder might submit a dispute to have the transaction reversed. The customer must dispute their claim with the merchant directly if they want a refund.
No Delays In Payment
As we discussed earlier, bitcoin payments are made instantly. The time it takes for you to receive payment is not days or weeks. Put all treasury concerns to rest. As soon as the transaction is approved, you receive bitcoins in your wallet (around 10 min). Then you can use it whatever you want.
Available Around The Clock
Banks occasionally close. They have a getaway. Neither on the weekends nor at night do they handle payments.
Bitcoin prevents that from happening. Transactions in bitcoin happen instantly, from your wallet to the buyers. The blockchain never sleeps, thus it operates every day of the year, at any time. Bitcoin is the way to go if you want to receive your payments immediately.
Micro-transactions On Lightning Network
The benefits that the Lightning Network has over on-chain transactions are available to merchants. For instance, the typical Lightning Network transaction charge is a mere fraction of a penny, compared to the average on-chain service charge of $13.79 USD. The Lightning Network does not require miners to verify transactions because it operates off-chain. This implies that Cryptocurrencies on the Lightning Network are practically instantaneous because they are carried out far faster than on-chain transactions.
The Lightning Network enables micro-transactions using Bitcoin by lowering fees and speeding up transactions. Even before the recent increase in on-chain transaction costs, it would not be sensible to utilize the base layer of Bitcoin to pay for a modest item like a cup of coffee because the transaction charge would.
Like any latest tech, Bitcoin attracts a lot of interest, and businesses who start using it as a form of payment often see an increase in clients. Businesses and individuals can transact with anyone in the world by accepting Bitcoin payments. Companies can advertise their services and products to bitcoin users in order to raise brand awareness among the Bitcoin user community.
This improves brand recognition without incurring any upfront costs, which benefits businesses that take Bitcoin. Having said that, processing Bitcoin payments will provide your company a competitive edge over all other businesses. Bitcoin payments give businesses a more effective means of exchanging money while also boosting consumer growth; a win-win.
How Crypto Cross-border Payments Work
In this section we’ll give you a quick rundown about exactly how crypto cross-border payments work— they’re a lot easier than you would imagine! Let's suppose that you’re based in Africa and are looking to make cross-border payments to a client in another country. Here's is an example on how you go about it
- Step 1: You decide that your business wants to send funds to your client based in abroad
- Step 2: You will convert your fiat currency into digital currency
- Step 3: Your crypto is held in a safe and secure wallet
- Step 4: You will send the address of your crypto wallet to your client in abroad and they will simply convert the wallet to crypto or fiat currency
- Step 5: And you’re all done!
Cryptocurrency clearly has the potential to become a significant cross-border B2B form of payment as worldwide acceptance increases. For cross-border payments, 60% of multinational corporations already use cryptocurrency or blockchain.
Which Cryptocurrencies Are Best For Cross-border Payments?
The ideal cryptocurrencies for sending overseas are those with low gas costs and high liquidity (so they can be quickly changed back to fiat money and used). However, keep in mind that practically all cryptocurrencies will offer lower transaction fees than Western Union, MoneyGram, and other banks given the expensive expense of sending remittance in the first place. An appealing option for sending money abroad is bitcoin. Bitcoin is your greatest option if you want to send money.
Other options also include stablecoins. Inflation is not a concern because these are pegged to fiat currencies, and fiat-backed stablecoins are additionally maintained by high liquidity. Therefore, stablecoins like BUSD, USDT, or USDC are all excellent choices.
Send Money Abroad With Bitcoin Using StashWave
StashWave enables users to send and receive money through the BTC infrastructure. Users are able to receive payments by sharing BTC QR Codes or LND invoices. They are able to pay to other users using the same. In addition to sending and receiving money, users are able to buy bitcoin using their cards.
The ability of StashWave to instantaneously convert incoming BTC to USD and withdraw to bank accounts sets it apart from other custodial wallets. This shields customers from swings in the BTC price, allowing them to leave cryptocurrency without needing to find a third-party supplier.
StashWave's goal is to lower the entrance barrier for businesses while assisting them in understanding the advantages of accepting Bitcoin payments. Since our system makes it simple for every business to start using Bitcoin in a matter of minutes, we feel that every company can gain from taking Bitcoin payments. To discover further about Stashwave, Bitcoin, and how it may benefit your business right now, explore more of our resources.