Utilizing a Stellar-based service for cross-border transactions it is possible to move international using standard instructions, an efficient and contemporary method to perform B2B payments. Stellar can replace the process of foreign wires and currency exchange which makes transactions more efficient and speedy.

The Problem

In conventional B2B transactions the service provider decides the method by which they wish to be compensated. It’s a bank-to bank protocol which requires the client to cooperate with their bank to make a money and the bank that is their correspondent exchanges currency for the customer, determines the rate of exchange and then charges the fee.

The settlement time is usually 2 to 5 business days dependent on the country as well as the banks that are involved. Banks also charge high charges of about 6 percent due to the many intermediaries that are part of the system.

The Solution

Making a solution to international cross-border payments, Stellar solves the money and time problems that arise from traditional B2B transactions. Stellar allows financial institutions to process the same transaction in a matter of minutes for less than the cost and also eliminate large exchange rates and banking charges.

Combining the advantages of a blockchain-based, frictionless method for payment with a local counterpart, Stellar allows on and off-ramps for all currencies around the world. Local partners can also be identified as anchors, which are used to shift anchors around the stellar network while also paying out and accepting traditional currencies within their respective regions.

The benefits of using blockchain for cross-border payments

No middleman

Blockchain eliminates the requirement for intermediaries, correspondents or central authorities to handle payment processing. The transactions are made between two parties who have signed a joint agreement, which guarantees confidence in the system.

Reducing turnaround time

Since there aren’t any central authorities or middlemen who are involved in the processing of payments, the time it takes to complete is shorter for settlements and the money is transferred more quickly across boundaries.

Security

Since the information for the transaction have been encrypted and hashed the transaction cannot be altered. alter the information. Modifying one block of the chain makes the other blocks invalid, by altering their hash value.

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