Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
Half of Multinational Firms Use Digital Currency for Cross-Border Payments (or Plan to)
PYMNTS | Nov 10, 2021
Cryptocurrencies are quickly finding favor as digital assets with diverse applications. B2B companies, financial institutions (FIs) and FinTechs alike are eyeing their potential as a rising number of companies tap virtual currencies.
More and more companies are seeking solutions that can help them make easy, swift payments no matter the market. Using digital assets can simplify certain facets of these transactions, such as enabling companies to consolidate and track their payments in one place.
See: 2021 McKinsey Global Payments Report
In fact, 50% of multinational firms use digital currency for cross-border payments or plan to do so, according to The Cryptocurrency Payments Opportunity, a PYMNTS and i2c Inc. collaborative report you can access here: The Cryptocurrency Payments Opportunity
“That’s the big use case,” Jim McCarthy, president of i2c Inc., told PYMNTS. “If you ever needed to move money around the world, you learned quickly that it wasn’t easy. And so, cryptocurrencies present several cross-border benefits to businesses — and, I’d argue, consumers — with international interests [in terms of] money transmission.”
Eliminating Friction Is Key to Growth
Supporting smooth, speedy cryptocurrency payments can still be a challenge, however. This is especially true for cross-border payments, which are notoriously complex — even using fiat currencies. Changing regulations, the availability of key digital infrastructure and trust all can hamper crypto's adoption.
See: The Most Efficient Payment System In The World: Bitcoin And The Lightning Network
As a result, international firms that wish to make cross-border B2B payments via cryptocurrencies could face significant hurdles, meaning banks must carefully examine trends surrounding virtual currencies worldwide. Eliminating friction points is key to the growth and adoption of cryptocurrencies on a global scale.
B2B companies, FIs and FinTechs are all taking rapid steps to move toward making virtual currencies part of the mainstream payments ecosystem. This is creating greater competition between legacy FIs and nimbler FinTechs looking to play a dominant role within the space, especially as cryptocurrencies’ potential applications capture more attention.
In the cross-border B2B payments space, for instance, utilizing cryptocurrencies and the blockchain technologies that support them could give companies a competitive edge over the next few years as business becomes more global.
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