There’s a quote among the blockchain community that goes like this, “Remittance is one of the greatest use cases of blockchain technology.” And rightly so. The traditional methods of money transfer, be it through centralized banks or Money Transfer Operators (MTO), have long been charging customers high transaction fees but providing slow services. This comes as a shock since remittance services send and receive around $500 million through cross border transactions annually, the majority of which are foreign transfers between workers and families.
With recent development in the Stellar Blockchain, remittance payments can now be easily carried out without the drawbacks found in digital money apps, remittance service providers, and traditional MTO’s. Remittance Payment Platforms supported on the Stellar Blockchain provide users with a slew of benefits like quick transactions that can be tracked, an open secure protocol, and a trusted gateway.
We, at Blockchain App Factory, are adept and skilled developers who pride ourselves on our riveting development services in the blockchain and decentralized finance sector. With our services, you can develop and launch your own Remittance payment gateway based on the stellar blockchain and offer copious users a robust platform for their money transfer needs.
There are three standard functions that are requisites for a successful blockchain network - reduced transaction costs, speed, and scalability. For the network to succeed, these are paramount. And the Stellar Blockchain Network is one that meets them all. Also known as a payment protocol, the Stellar Blockchain is based on the distributed ledger technology that facilitates the transfer of any type of cryptocurrencies and other modes of currencies. To make matters simpler, it is quite similar to other blockchain-based cryptocurrencies.
Every transaction that comes to pass on the stellar blockchain is added to a shared, distributed public ledger which is an open database that anyone can access. But unlike the standard blockchains, this one has its own consensus method that facilitates quick transactions. This method allows for swift transactions that are very cheap as well. It is a global exchange network with the capability of hosting thousands of transactions and exchanges between cryptocurrencies and fiat currencies, giving users the best of both worlds. Its native token XLM called Lumen is utilized to pay transaction fees and maintain accounts on the stellar network.
If you’ve still got doubts about trusting the Stellar Blockchain, have a look at the benefits it offers your business and users.
Blockchain App Factory’s Remittance Payment Platform Development solutions assimilate these benefits and more into our development and design, enabling fast and cost-effective transfers for your users, creating new possibilities for you in the financial markets.
Although traditional remittances and central authorities have been sending and receiving payments and money orders for several years, it is hard to deny that they face several challenges that are now being overcome by the Remittance payment system on the Stellar Blockchain Network. Some of these challenges include
Prolonged time to process and make transactions
Reliance on local agents to pay out the transferred money
Digital banks and wallets are unable to move money from developing economies
Compensations between the agents and MTOs do not happen simultaneously in real-time.
Instead, balances are settled based on a schedule through commercial banks
Fintech companies who wish to extend their services on international grounds will have to create relationships and maintain accounts with local banks
These banks charge foreign exchanges additional fees, which is inadvertently passed on to the customers, who end up paying immensely for money transfer
In a traditional system, the workflow of remittance goes like this
But in the Remittance payment platform supported by Stellar Blockchain, the process is a far cry from the traditional route. The workflow of the payment gateway goes like this
Assume a money transfer company in one country collects the funds (1000 USD) to be transferred from the customer. The Stellar Blockchain will then convert it into an equivalent amount of digital fiat tokens or XLM Lumens.
In this step of the transfer process, the Stellar Distributed Exchange (SDEX) will trade the 1000 USD tokens of the sent amount to 4090 BRL (Brazilian currency), the currency of the receiver. This trading process is quite similar to trading crypto tokens on an exchange, and this trade takes place on the Stellar Exchange. The process of the fiat tokens being converted back into currency is via a path payment operation.
Once the trade is completed, the receiver or beneficiary will find the transacted amount in their respective accounts. This transferred amount can be deposited to the recipient’s wallet, bank account, or another local trail. The entire process is carried out seamlessly, with minimal costs being incurred.
Within the Stellar Blockchain network, anchors or nodes like in a blockchain are responsible for facilitating the transfer of funds. Anchors also provide Stablecoins - fiat-backed tokens that can be utilized by the users. There are several anchor businesses within this landscape. Some notable anchors include Cowrie, Settle, and Tempo.
The Remittance Platform running on the Stellar Network allows for several benefits users can experience that they weren’t able to with traditional platforms.
Speed - All transactions on the Stellar Blockchain will not take longer than 5 seconds to be completed.
Varied currency support - Users can transact in USD, EUR, NGN, MXN, BRL, ARS, and more. Other new digital currencies that are created can also be added to the platform.
Absence of pre-funding requirements - Working capitals, which are usually mandatory in MTOs, are now off the charts to initiate real-time transactions in digital currencies.
World-wide scale - Since the Stellar Blockchain is distributed worldwide, businesses providing remittance services can access a wide geographical area.
Built-in features - KYC and AML are unified and integrated with the application.
Reduced cost - The overall cost of remittances is drastically reduced.
Open - protocol - The money being transferred moves in real-time in an open-source protocol, physically.
Tracking - Customers can track the transaction as it takes place, which places a lot of trust in the Remittance platform.
In today’s scenario, regular remittance providers, Fintech companies, and traditional banks face a lot of friction and deal with the consequences of incurring several costs that come with transferring money through international borders. Launching a Remittance payment gateway on the Stellar Blockchain will discard all these liabilities and provide a streamlined and seamless method of transfer that users will engage with continuously.
At Blockchain App Factory, we specialize in the development and launching of various DeFi and Blockchain-related applications and protocols that have satisfied businesses and the customers who use them. We excel in our craft, and so provide quality white-label and scalable solutions that will support and scale your Remittance Payment Gateway business on the Stellar Blockchain.
Connect with us so we can discuss how your venture in this lucrative industry can propel you to great heights!
