Regardless of the technological milestones the finance sector has achieved over the years, merchants and freelancers seem to struggle in breaking the barrier of international payments.
A few of the vital limitations of existing multi-billion dollar traditional payment systems and networks such as Visa and Paypal are cross-border payments, efficient settlements, high costs, and restricted security protocols.
Mainstream users utilizing traditional payment networks often wait for 5 to 7 working days to settle their transactions. While this may not affect freelancers and merchants in established economies like the United States and United Kingdom, individuals dealing with highly volatile and unstable currencies such as Argentine peso and Venezuelan bolivar could suffer from significant losses during the settlement period.
Because of the inefficiency of conventional online payment systems, e-wallets and alternative “enhanced” fiat-based financial applications naturally emerged over the past few years, as e-commerce sales spiked worldwide.
According to South Korea’s largest media network Chosun , online shopping or e-commerce transaction volumes have increased by over 50% since last year, and is predicted to reach around US$500 million in 2016 in the country.
“E-Wallets center on consumer accounts that have been pre-registered with these providers. These accounts store payment details based on consumers’ preferred funding source. Common sources include traditional payment options like credit or debit cards, bank accounts or direct bank transfers,” stated Lawrence Cheok of Moduslink in a report entitled “ E-Commerce Trends and Payment Challenges for Online Merchants: Beyond Payment. ”
“These e-wallet providers act as a trusted intermediary—trusted by consumers and merchants alike— for storing payment information and facilitating ease of checkout between buyers and sellers. In recent years, these providers are also transiting into the mobile wallet market for offline payments at POS terminals,” added Cheok.
However, these financial “intermediaries” and escrow payment systems implemented by developing markets like China and Malaysia have […]
