Align Commerce announced yesterday that the public beta of its international payments platform had launched, which could cut the cost and time of transactions in a $24 trillion market. Thirty-four countries are now exposed to this beta.
“The $24 trillion cross-border payments market is growing at a breakneck pace, expected to eclipse $54 trillion by 2022, despite a highly inefficient and expensive system in which businesses spend over $50 billion on wire and foreign exchange fees, wait up to seven days for transactions to complete and have no visibility into the process,” said Marwan Forzley, CEO and Founder of Align Commerce, in a statement.
Align Commerce uses the blockchain to expedite money transfers. When transferring money through the normal banking system, numerous intermediaries each take a small fee. By eliminating that, the money can move much faster and for fewer fees.
Forzley explained the workflow in an email to Bitcoin Magazine: Business A pays its bill using a local payment system such as Automated Clearing House (ACH.) Business B gets paid via its own local payment system.
“The speed of the payment end-to-end depends on the speed of the local payment systems, and that varies on a country-by-country basis,” Forzley explained.
What makes the tool particularly useful for potential businesses is that there are no changes to the way they do business.
“The key is that there are significant advantages for the businesses using the blockchain in terms of savings in time and money,” Forzley explained. “In addition, there is no change of behavior required. The blockchain is used behind the scene as a rail that moves fiat to fiat between two parties.”
“Align Commerce is the first company to successfully tackle international payments between businesses using the blockchain, allowing companies an easier, faster and less expensive option for cross-border transactions,” said Dan Morehead, CEO at Pantera Capital, in the statement.
Align Commerce is able to cut the cost for businesses as well by cutting time it takes to process the payments and how many middlemen participate in the transfer. Only the company that has to change currencies pays a 1.9 percent exchange rate fee on top of the amount of money it wants to send. Therefore, the buyer has to pay the exchange rate fee.
Businesses might be worried about the volatility of Bitcoin while the payment is going from point A to point B. Though it is faster than traditional means, Align Commerce still can’t have the payment transfer instantly because of local exchanges. But according to Forzley, the company manages any price volatility issues.
Using the blockchain to make faster payments around the world is a use case Bitcoin enthusiasts have been proponents of for a long time. Align Commerce hopes to finally fix that problem.
Jacob is a product manager working in the industrial news space as well as a freelance writer covering finance. He found bitcoin randomly, fell in love with its potential, and has been addicted to it ever since. He runs a weekly newsletter about bitcoin at CryptoBrief.com