Blockchain creates a new world of cross-border payments

With the development of globalization of various enterprises, various cross-border e-commerce platforms have also emerged rapidly, and cross-border payment has become the hottest and most difficult problem to solve.

Cross-border e-commerce, cross-border logistics and cross-border payments are always inevitably linked. With the “savage growth” of cross-border e-commerce, the problem of cross-border payment has become more and more prominent. For cross-border e-commerce platforms and sellers, or only to solve key cross-border payment problems and stabilize the capital chain, can we let the business spring up and move towards a more international path in the future.

Security challenge of cross-border payment

While cross-border payments extract the profits of cross-border e-commerce in China, its financial security for Chinese merchants cannot be ensured. Due to the fact that overseas institutions are not regulated by China, some businesses are in a gray area, and because their channels in China are very unstable, the issuers of RMB are constantly changing. Especially in January last year, a number of Chinese merchant accounts were frozen. So people questioned the security of these offshore payment platforms.

A cross-border game maker has long exceeded its payment fraud rate because of the use of fake emails and phishing by criminals: forging emails or phone calls from banks or suppliers to request the information of account and password.
These fraud techniques are full of tricks in their ingenious disguise. From the simplest to the most complicated tricks, it is difficult to distinguish between true and false, and many people eventually deceived. Sometimes a large number (sometimes tens of thousands) of people are victims through Trojan horse programs and web site grafting. Fraudsters usually target the most vulnerable links, and the means of fraud are changing as the payment environment changes. As a result, the fraud rate of the enterprise is high and the losses are very sroblems 1557729236366.png
The relationship of cross-border payments is too complicated and is particularly difficult to implement. In order to support the development of cross-border payment, last year, the State Administration of Foreign Exchange issued the "Notice of the State Administration of Foreign Exchange on the pilot implementation of Cross-border Foreign Exchange Payment Services of Payment Agencies" and "Guidance on pilot of Cross-border Foreign Exchange Payment Services of Payment Agencies".

The pilot of cross-border foreign exchange payment services of some payment institutions was carried out, allowing payment institutions to provide foreign exchange funds collection and payment, settlement and sales services for both sides of cross-border e-commerce transactions. As a result, more payment agencies can apply for cross-border payments.

Cross-border payment has been strongly supported by the state, but more institutions are involved in the cross-border payment industry. The security of cross-border payment cannot be solved, but there are more problems that cannot be solved. To solve the security of cross-border payments, cross-border payments must be made more just and fair, and achieve high transparency.

In recent years, the biggest feature of the hot blockchain is fairness and transparency, and the points and points are clear. So what kind of chemical effects will be produced by using block chains in the field of cross-border payment?
Using the blockchain network, traditional financial institutions, foreign exchange market makers, and liquidity providers are added to the payment network to build a payment gateway. Through the payment gateway, the digital asset flow on the blockchain can be connected with the legal currency in reality, so that the legal currency can be converted into digital assets on the blockchain, which is convenient for subsequent payment and transfer. Through the network connector in the blockchain payment network, it can connect traditional market makers, remitting banks, receiving banks and other institutions, and abandon the intermediate transaction links to achieve peer-to-peer fast and low-cost payment.

According to the current traditional network payment architecture, the transaction process of cross-border payment is deeply analyzed. This paper combines the characteristics of blockchain technology to construct a cross-border payment solution based on blockchain.

The specific solution can start with the following:

(1) In the payment initiation phase: In the section of KYC (anti-money laundering identity verification), the identity information of the remitter can be launched on the blockchain, and the trust between the payer and the bank (or remittance agency) can be established by means of electronic identity file. It is also possible to define the rights and obligations of the transfer between payers through smart contracts.

(2) At the stage of transfer of funds: all actions in the process of fund transfer, including identification of both parties, as well as confirmation of exchange rate, amount of transfer, time of transfer, terms of payment, etc., can be carried out through smart contracts, real-time transfer can be realized, with no delay, and do not need the participation of the agent bank, reducing the intermediate costs.

(3) At the stage of fund delivery: according to the smart contract, it will be automatically deposited into the payee's account after the agreed time, or the payee will be allowed to withdraw after the KYC authentication process is performed by the receiving bank.

(4) At the stage of supervision: Since the information on the blockchain is non-tampering and traceable, all related transaction information can be queried on the blockchain. Regulators can review at any time or even meet the need for continuous review.

Blockchain itself has the function of cross-border payment, blockchain + cross-border payment, with many incomparable advantages over other technologies. Its first product, Bitcoin, has long achieved cross-border payments. It can be said that the blockchain is applied to cross-border payment, which is completely fine in technology.

Blockchain + cross-border payment has a prospect of leap-forward development. It is hoped that the blockchain and cross-border payment will complement each other and make the globalization of Chinese e-commerce more secure.