How Blockchain Technology Is Impacting the Future of E-commerce and Cross-Border Payments

Blockchain two hands shaking in digital space

Just as the internet upended how humans process information, blockchain has the potential tocompletely transform how consumers around the globe exchange value, transfer ownership of goods, verify transactions, and pay for everyday services. 

Today, multiple sectors are already seeing the benefits and applications of blockchain technology, from telecoms and automotive to high-end real estate. But it’s the retail industry that will have the most immediate and immense potential for integrating blockchain technology, which will help both big retailers and smaller e-commerce businesses drive greater ROI than ever before. 

Blockchain technology provides the ability to establish a decentralized environment that will not onlybuild greater trust between businesses and consumers, but also enable more transparency in transactions. In the e-commerce world, one important component is being able to manage cross-border payments, which are used on a daily basis. Yet current systems pose a lot of problems, and therefore need to be challenged and addressed.

In a fast-evolving retail ecosystem, retailers must integrate technologies that will broker customer satisfaction while ensuring seamless fulfillment. One current path is leading more and more to the implementation of new blockchain solutions that can accelerate payments.

A Brief History Lesson

Cross-border payments tend to involve multiple parties, which can oftentimes lead to a very complex transaction process. These participants include consumers or businesses purchasing goods or services, the businesses that are the suppliers of the goods or services, and the e-commerce platform that is actually providing a functioning platform for the exchange. Typically, the payer and the payee are located in different jurisdictions and transact in differing native currencies, which can pose numerous other challenges. 

There are many PSPs (third-party payment service providers) who offer payment options that include authorizations and final confirmations, as well as processing supplier settlements with regional currency and through local financial institutions. However, there are several problems associated with how PSPs handle traditional cross-border payments, including issues like high costs and fees, transaction times that could take several days, lack of transparency of the payment process, and unpredictable exchange rates.

In 2020, TheWorld Bank estimated that the global average cost of sending $200 was nearly 7%, which is only expected to increase. Hence, there is now an immediate need for new payment rails that can leverage the power of blockchain technology to drive transactional costs down. 

Understanding Current Cross-Border Payments Processes

Cross-border payments cover both wholesale and retail payments, including remittances and the transfer of funds between banks, governments, individual, and businesses. This brings us back to the idea of the associated high costs of exchange rates and local taxes, as well as banks being required to provide funding in advance, which can create even greater risk.

The e-commerce industry is changing rapidly, and continuing to adapt tonew consumer behaviors and preferences post-COVID. Put simply, users today want a fast and frictionless shopping experience, and more secure services without paying high prices. And traditional cross-border payment methods have proven to be susceptible.

Globally, cross border trading is increasing at a high rate in emerging markets such as Africa, Latin America, and Asia. Yetdata shows that nearly 75% of businesses aren’t receiving their preferred settlement currency. Anotherstudy from LexisNexis showed that failed payments have cost the global economy upwards of $120 billion in fees, labor, and lost business. These are stats that online retailers simply can’t ignore.

Blockchain’s Ability to Solve Current Issues

Blockchain is defined as a distributed database that is shared among the nodes of a computer network, which store information electronically in a digital format (an immutable ledger for transactions). It has the ability to solve almost all the problems cross-border payments are facing for several reasons. 

First, a blockchain is not limited by country boundaries, and can interconnect banks on a single network. Blockchain eliminates the need of intermediaries thus providing the speed for real-time settlement, at very low costs and real time exchange rates. It’s relatively cheap when compared to the charges banks currently have due to the payment process, and is available 24/7. Unlike banks, payments are able to be processed any time of day, in any timezone, which makes the transaction faster for all parties while allowing businesses to meet these shifting consumer expectations. 

Bigger Retailers Getting Involved

Recently, the corporate world has made moves toward adopting blockchain. Companies like Walmart and Unilever announcednew plans for blockchain projects, and it is clear that others will look to gain an edge in developing blockchain-based offerings. 

There are also several new startups and businesses in the emerging Web3 space who are helping to accelerate innovation in the payments ecosystem. These companies are looking to solve critical issues around payments and transactions, enable cross-border payment transactions at higher speeds, and establish a global trusted community of payment providers.


The global blockchain market is set to reach over$10 billion by 2028, and some are predicting that crypto could disrupt traditional retail payments (due to reduced fees, faster transactions, and greater consumer choice). In the future, blockchain technology will fosterlimitless innovation in cross-border payments, allow for greater transparency and traceability, and give customers more choices and greater trust/confidence in retailers.

In today’s environment, it is imperative that cross-border payments become faster, more efficient, and transparent. The emergence of blockchain technology in the e-commerce world has the power to achieve these goals, right now. 

Maodong Xu, President ofRoxe Holding, Inc.

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