Discover the basics of cross-border payment, how money moves between countries, and the best provider to use.
There is a huge difference between an individual or business owner that has learned the ropes of cross-border payments and someone who only plays within their home country. Don’t get me wrong, doing your business within your country doesn’t make you the least among business owners. However, exploring global options will be more beneficial in terms of revenue and international recognition.
In today's world, cross-border payments are essential for promoting global trade, remittances, and economic expansion. Africa, with its resources and developing markets, stands to benefit from the cross-border payment systems. Through this article, I will be shedding light on how cross-border payment works, its challenges, and its significant impacts on Individuals and business owners.
What is Cross-border Payment and How Does it Work?
Cross-border payments refer to financial transactions involving individuals, businesses, or institutions located in different countries. These transactions involve various activities, including international trade settlements, foreign investments, remittances, and corporate payments. So, how does it work?
Typically, the process starts with the sender initiating the payment through a financial institution or a digital payment service provider. The sender provides the necessary details of the recipient, including their bank account information or mobile money account.
However, our currencies in Africa are currently not being used to trade internationally which is why widely traded currencies –USD, GBP, etc are used to facilitate successful transactions in and out of Africa.
A good example of this is, sending money from Nigeria to Ghana by using Bitnob as a cross-border payment provider to convert your NGN into USD which eventually gets settled into the receiver’s bank account or MOMO wallet in GHS–this happens in minutes leveraging Bitcoin infrastructure making it fast as though you are sending NGN directly to Cedis.
Benefits of Cross-Border Payments in Africa
- The cross-border payment system aids international trade, allowing African businesses to engage in global markets.
- It facilitates faster, more affordable remittances, supporting families and driving economic growth.
- Accessible and affordable cross-border payment solutions promote financial inclusion by connecting rural populations to the global financial system.
- E-commerce Opportunities: Cross-border payments facilitate international e-commerce, empowering African businesses to expand their customer base.
Challenges in Cross-Border Payments
Cross-border payments face several challenges that can impede their efficiency, reliability, and affordability. Some of these challenges include:
High Costs
Traditional cross-border transactions often involve multiple intermediaries, resulting in high fees, exchange rate markups, and hidden charges. According to a study conducted by World Bank, the global average cost of sending $200 was around 7% in Q4 2020.
Delays and Settlement Times
The involvement of multiple banks and payment networks can introduce delays and settlement inefficiencies, prolonging the time required for funds to reach the recipient.
Lack of Transparency
The opacity in transaction fees, exchange rates, and intermediary charges can make it easier for customers to gauge the true cost of cross-border payments.
Bitnob: The Best Cross-Border Payment Provider
While the above-mentioned challenges could be big turn-offs, Bitnob has proffered a solution that will not have you worried about making cross-border payments across Africa. Whether you want to make cross-border transactions for your business or personal reasons, you can use Bitnob.
Bitnob allows you to seamlessly send money to recipients in 8 different African countries including; Ghana, Togo, Nigeria, Kenya, Rwanda, Benin Republic, Senegal, and Ivory Coast. For example, you could be in Ghana and easily send money to your suppliers in Nigeria or even receive money from your customers. You can directly send money to their local bank accounts or Momo wallets.
Here are a few reasons why you should consider Bitnob as a cross-border payment provider;
- The user interface is easy to navigate
- Security and compliance are top tiers
- There are multiple channels to communicate with the customer support team
- Transaction charges are unbelievably affordable
- You do not need intermediaries as every transaction is straightforward
How to Make Cross-Border Payment With Bitnob
To use the transfer feature on Bitnob to make cross-border payments into the recipient’s bank account or mobile money wallet, you are required to download the Bitnob app, verify your account, and fund your USD wallet, and you can then follow these easy steps to make cross-border payments with Bitnob
- Tap on the “Transfer” button on the Quick Links section of the homepage
- Tap on “Change currency” to select the country of the account or mobile money wallet you want to transfer money to.
- Fill out the amount you’d like to transfer, then tap on “Continue”
- Select the account or mobile money provider and fill out the details of the account your want to send money to. If this person would be someone you intend to send money often, then tap on “Save as beneficiary” to make make the person a beneficiary.
- Tap on “Proceed to Transaction Note” to add a note on the transaction
- Review the transaction summary and then tap on “Proceed” to initiate payment to the account or mobile money wallet.
Stay Connected with Your Loved Ones and Customers Across Africa!
Cross-border payments– especially in Africa are essential for facilitating the smooth flow of international trade. As business owners that want to have international customers, Bitnob is the cross-border payment provider that you need. This also goes for you as an individual that wants to send money to your loved ones across Africa.
Ready to experience the most seamless cross-border transaction? Download Bitnob to get started.