We live in the only genuinely globalized period in history.

Whether it’s products or employing others, the need for seamless international transactions has never been higher. According to Statista, the total transaction value for global payments is estimated to reach $16.59tn by 2028.

Whether it’s high fees or slower transfers, traditional methods such as wire transfers aren’t always good enough for what the modern world demands.

Luckily, recent technological and financial infrastructure advancements have made faster, cheaper methods possible.

Innovations like the blockchain, various fintech platforms, and digital wallets have made it possible to transfer funds almost instantaneously, bypassing traditional banking systems and their associated delays.

Today, we’ll explore why seamless international transactions through digital tools and platforms are so useful and what benefits they provide, including higher security, faster transactions, and lower fees.

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Understanding international transactions

International money transfers involve sending money from one country to another through a complex network of banks and financial institutions.

For several decades, the majority of the world has used wire transfers, which by and large rely on the SWIFT network.

While SWIFT is known for being secure, it is also often slow and expensive. This is because the SWIFT method often involves sending money through multiple intermediary banks, each of which adds its own fees and processing times that delay your transfer and leave you with a sizeable total cost at the end.

And then there are seamless international transactions.

Digital technology can facilitate seamless international transactions by bypassing many of the hurdles that traditional bank transfers face. Rather than a wire transfer passing through multiple large and slow banking institutions, digital platforms can connect senders and recipients directly or through a single platform.

If you were to send money to the Dominican Republic via SWIFT, for example, you would likely find a hefty fee attached to your transfer, and wouldn’t be able to send or receive transfers during weekends or bank holidays. On top of that, you may even face a few days of waiting time, even during work days.

Meanwhile,  sending money to the Dominican Republic via seamless digital methods would typically incur much lower fees, and, more importantly, result in near-instant funds transfers, no matter what day or time you send it.

What Are the Benefits of Seamless International Transactions?

There are many benefits to digital seamless international transactions – here are five of the most important ones:

1. Faster Transfers

Where wire transfers can take days, most seamless digital international transactions take only a few minutes at most. When time is of the essence, the difference of several days vs a few minutes can mean a lot, making digital platforms for seamless international transactions a solid choice.

2. More Cost-Efficient

Traditional wire transfers often incur high fees, including charges from intermediary banks. Choosing the right digital platforms with low fees can often be a good way of saving money, especially across many international transactions.

3. High Security

While SWIFT payments are secure, reputable digital transactions often leverage advanced encryption and blockchain technology for even more effective security, providing a transparent and tamper-proof record of transactions to reduce the risks of fraud.

4. Great Accessibility

While banks often require a lot of paperwork and identification, digital platforms are accessible to anyone with an internet connection, making international transactions possible from virtually anywhere in the world. This is especially useful for those in remote regions.

5. Higher Financial Inclusion

Alongside helping those in remote regions, seamless international transactions via digital platforms help those in unbanked and underbanked areas. If you live in a more rural area far away from any bank branches, digital wallets and mobile money services can help you more easily send and receive money internationally.

The Future of International Transactions

Digital and seamless international transactions are still in their infancy, and many new technologies are emerging that will only improve this new sector.

Traditional institutions are already well on their way to more seamless international transactions, with creations such as Central Bank Digital Currencies (CBDCs) being used to advance this.

CBDCs combine the security and stability of traditional fiat money with the efficiency of digital transactions, aiming to simplify international trade under the protection of government institutions.

In addition, Decentralized Finance (DeFi) is also taking digital payments a step forward, leveraging blockchain technology to offer financial services without traditional intermediaries. This is both enhancing transfer speeds and reducing costs for international transfers.

Both CBDCs and DeFi are already significantly improving the speed, security, and cost-effectiveness of digital transfers.

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How Digital Technology is Revolutionizing Cross-Border Transactions

Innovations like blockchain, digital wallets, and fintech platforms have streamlined the process of international payments, making it faster, cheaper, and more secure to send money across borders.

These advancements are so successful that the traditional banking sector is now trying to adapt and adopt these new technologies, helping more and more people benefit from faster and cheaper cross-border payments.

And it’s just the beginning. As more and more innovative technologies emerge, seamless international transactions will only get faster, cheaper and more secure.