IBM Lambasts Current Cross-Border Payments as Being Too Difficult and Long

Cross border remittances are more like taking a trip around the world than sending a video to friends over Whatsapp. Anyone who has grown up with debit and credit cards as a defacto standard has trouble with this and rightly so.

When you go on a trip, you need to do a variety of things. Find your passport for one. Then you need to buy tickets, get through airport security and finally fly to the destination you've chosen. Then the reverse happens where airport security checks you again where you are now finally ready to enjoy your time in another city.

Contrast that with online shopping — your search for a cheap mobile phone Aliexpress. Your details are stored from the previous purchase you made. You click one, confirm your details and that's that. Your money is no longer in your account and you are waiting for your new phone to arrive.

Old systems lack progress

Many of the systems that are currently in use to transfer money between countries are legacy systems. They have an increased in power and speed in the meantime but they are still very centralized and due to the immense number of transactions they need to do batch processing. This means that there will always be a time delay between your transaction in one country and the corresponding transaction in another.

Distributed ledger technology has been around for close to ten years and new iterations have become more secure and more decentralized than ever before. In fact, the Stellar network is extremely fast, very secure and has an infinite capacity to grow due to the decentralized aspect of its network. The more entities that use the network, the faster the network will be able to process transactions, all over the world.

That is the key thing about blockchain. It does not belong to one single person. Once a centralized technology is let out of the bag, it is able to be used by everyone. If it is well designed, with thought given to backups and network congestion, then even if the originating organization is taken offline, it will still not affect the overall health of the network.

IBM partners with Stellar to bring World Wire to clients

IBM has created World Wire, a distributed ledger based money transmitting system that is already working. It is online and backed by one of the largest enterprise-focused companies in the world. It is ready now to transfer money almost instantly to 74 different countries and in 47 unique currencies. IBM explains that blockchain is at the point where it's not just a conceptual technology anymore. It is workable. It is usable and has already started disrupting various business sectors.

The problem with all the hype around blockchain disrupting everything from personal identification to Intellectual Property security is the same thing that plagues all new technologies — getting the hard work of embracing it among the larger population.

That's not to say that the average consumer is unaware of cryptocurrencies or blockchain. It's simply that they do not ask for it to be integrated at their favorite restaurants or sports arenas. Few people want to go to the trouble of buying cryptocurrency,which is why the two first major currencies on IBM's blockchain solution will be USD and Stellar Lumens.

Lumens can be used for anything and anything can be converted into a token on the Stellar network. The more banks that move to World Wire and Stellar, the easier it will be for people to simply use the money they receive from their salary to pay for anything they want. Just like they do with cash.

IBM knows that getting industry, particularly the consumer-facing industry, to adopt blockchain payment processors massively is a big ask. However, they are confident that they can do it. The writing is on the wall and the disruption is being seen in all corners of the industry at this early stage.

Only once the hard work is done will we truly be able to see how disruptive blockchain technology really is. When every major vendor is using blockchain to accepts payments from a wide variety of sources will we finally see how we have changed. In a world where transaction fees are minimal, where cross-border remittances are instant and the financial world moves as quickly as the connected world that surrounds it.