According to 2020 World Bank data, the average fee (including currency markups and transaction fees) for international money transfers takes up 6.8% of the total spending. This is a fee that adds up for individuals over time, but especially so for the growing amount of companies going into international businesses in 2022. 

As of 2022, the global payments industry is one of the most competitive markets. In this ecosystem, fintech and banks are starting to cooperate because both recognize the mutually beneficial potential. 

On the one hand, traditional payment providers will slowly fall behind without digital integration. On the other hand, fintech companies that are looking to gain credibility in a saturated market can win over more clients with the backing of a bank.

Global cross-border payments are growing at about 5% annually (CAGR), and are expected to reach a total volume of $156 billion by 2022. Although this market is growing, it’s not without its growing pains. 

Let’s take a look at how privacy and decentralization can both be achieved in the international transfer market, and how one company is leading the way towards more pain-free cross-border transactions. 

Defining The Largest Pain Points in International Transfers

The largest pain points in international payments are cost, speed, and lack of transparency and access. There has yet to be a fast, secure, and low-cost international payments system implemented that provides genuine solutions to both individuals and industries. 

In response, a number of fintech start-ups have sprung up to address the problem—and many are proliferating in the blockchain scene. Blockchain technology can not only quicken but also simplify cross-border payments, cutting out much of the remittance that tends to add up for international transfers.

Image Credit: Markus Spiske,

To date, the costs of remittance have been approximately 5%. Blockchain, on the other hand, reduces the transaction costs to less than 1% while also providing guaranteed, real-time transactions. Blockchain technology also cuts transaction time down significantly, with it currently taking 4.6 seconds. Helping to increase security while reducing the risk of loss due to currency fluctuations and time—Blockchain is an omnipotent solution. 

With a system in place that can be both international as well as low-cost, businesses can become more customer-facing. This makes for a win-win, giving companies the capacity to give customers more of what they want, in turn generating more loyalty, and also saving companies internal costs thanks to the mitigated cost of blockchain transactions.

The math is simple, with fewer expenses, more time, and more customer satisfaction—businesses that employ blockchain technology can get past the pain points of international transactions.

Building Mutually Beneficial Relationships in Finance

With businesses contributing nearly $2 trillion in cross-border payments each year, it is time for companies, both financial and otherwise, to get serious about blockchain technology.

If more businesses get on board with blockchain, it can open the door for financial institutions to explore ways to implement the technology as well. This will help to create an economic ecosystem that can reduce transaction costs, increase transaction speed, mitigate fraud, and eliminate the need for multiple unnecessary transactions per purchase.

In order for traditional services to streamline their operations for the modern age, getting on the digital interface will be a prerequisite at the very least. With globalization also growing at an accelerated rate, removing the friction from the flow of remittance while remaining easy, fast, and transparent to customers will soon be the new standard for international financial transactions.

One company, Tempo, is looking to help catalyze this transition. An electronic payment institution, Tempo is the principal EU anchor for Stellar blockchain payments helping to open a network for moving value internationally with standard instructions.

By utilizing the latest cutting-edge technology empowered by Stellar, coupled with a powerful PSP engine, Tempo Money Transfer has the power to remove the convulsion of international transactions and enables the performance of remittances in near real-time. Removing the need to wait days to send and receive money, everything is done fast, secure, and using the best possible prices and conversion rates.

The Future of Global Finance

Global regulations in finance have only become stricter in recent years and alongside extreme digital transformations, the struggle for financial institutions to keep up is only being perpetuated.

Encouraging businesses and individuals globally to consider the benefits of cryptocurrency will help to remove the taboo, get past the buzzworthy claims, and find tactic ways to which it can be implemented into the financial ecosystem. This will especially help in removing the main pain points of international transactions—opening up a new era of financial globalization. 

Disclosure: This article mentions a client of an Espacio portfolio company.