Global payments form the backbone of today’s interconnected economy, yet traditional cross-border payment systems are riddled with inefficiencies. Whether you’re a business sending funds overseas or an individual remitting money back home, you’ve likely experienced the frustration of slow transfers, excessive fees, and opaque processes. In this post, we explore why global payments remain “stuck” in outdated systems and how stablecoins—digital currencies pegged to real assets - offer a transformative alternative. Through data-driven insights and real-world examples, we reveal how stablecoins can deliver faster, cheaper, and more transparent transactions, ultimately revolutionizing the way money moves across borders.
High Fees
One of the most glaring issues with conventional international payments is their high cost. Traditional banks and remittance services impose steep fees that can amount to a significant percentage of the transaction. For instance, sending a modest amount overseas may incur fees ranging from 3% to 10% of the total, which adds up to billions of dollars lost globally each year. These fees arise from the multiple layers of intermediaries—correspondent banks, exchange operators, and processing fees—that each take their share from the transaction. For businesses and individuals alike, these costs not only reduce the value of the money sent but also make global commerce less efficient. It’s almost like consumers and businesses have been subject to a decades long duopoly consisting of banks and money transfer operators limiting choice, stifling innovation and keeping prices artificially high.
Slow Settlement Times
Time is money, yet traditional cross-border payment systems operate at a snail’s pace. Most international bank transfers take between 2 to 5 business days to settle, and in some cases, even longer. This delay is caused by several factors: time zone differences, batch processing by banks, and the inherent delays in networks like SWIFT. In today’s fast-paced world, waiting several days for funds to clear can disrupt business operations, hinder cash flow management, and create uncertainty for both senders and receivers.
Lack of Transparency
Another critical shortcoming of traditional payment systems is the lack of transparency. When funds are transferred internationally, the sender and recipient are often left in the dark about the transaction’s progress. With multiple intermediaries involved, tracking the exact status and understanding the breakdown of fees becomes complex. This opacity not only breeds uncertainty but also makes it difficult to resolve issues when they arise. In an age where information is expected to be readily accessible, this lack of clarity is a major drawback for businesses and individuals relying on these systems. It also creates uncertainty and stress and yet still traditional cross border payments are a service that comes at a premium. Through the lens of contemporary FinTech know-how, this is completely absurd and should be unnecessary.
Limited Access for the Underbanked
The global payment infrastructure has failed to serve all communities equally. Many individuals, especially in developing regions, remain underbanked or entirely unbanked. Traditional financial institutions often limit access with high entry barriers, strict documentation requirements, and steep fees. As a result, millions rely on informal, costly remittance channels—or are excluded altogether from the global financial system. This exclusion not only curbs economic opportunities for individuals but also stifles broader economic growth across entire regions.