Dubai, UAE, Feb. 27, 2023 (GLOBE NEWSWIRE) — Small and medium-sized enterprises (SMEs) will greatly benefit from increased simplicity and security by using blockchain technology to make international business-to-business (B2B) payments, Clavis Fintech -founder Kazi Monirul Kabir says.
According to Kabir, B2B payments in the traditional banking system rely on correspondent banks to get money to change hands, which sometimes requires multiple steps. These banks charge fees for almost every step of the way, increasing the cost of doing business. By using blockchain, companies can cut out the correspondent banks, which makes the payment process easier and costs less.
Kabir also says that despite what skeptics might think, blockchain is also much more secure, because each transaction is easier to track and verify.
“Every transaction on the blockchain is unique. There is no way to hide from and to where the payment goes. The entire ownership of the blockchain is decentralized. You can fool one owner, but you can’t fool the whole chain. So that’s why it’s very transparent and surely.”
Kabir clarified that B2B blockchain payments are different from illegal cryptocurrency trading, which can be used for money laundering, cybercrime or terrorist financing.
“B2B blockchain payment uses fiat currency, transforms it into a stablecoin cryptocurrency, and then exchanges it back to fiat.”
Kabir believes that it is important for SMEs to adopt blockchain for B2B payments because these businesses are the main drivers of the economy. Many large companies are largely satisfied with the traditional banking system and have the scale to absorb higher costs. On the other hand, SMEs need all the help they can get.
“SMEs are responsible for the largest part of economic activity around the world and they are the main drivers of economy and growth. As the world enters post-pandemic recovery mode, these companies are becoming more and more relevant. Although the payments they make are smaller, they are also more frequent – something blockchain can help facilitate.”
Kabir added that the changing business landscape is now even more favorable for the use of blockchain, as it can help simplify complex global logistics that are now more ecosystem-driven. For example, an e-commerce company in the United States may have one of its suppliers in China, while another supplier is in Vietnam.
“Blockchain makes it easier to manage multiple participants in the supply chain. By adopting it, the e-commerce platform doesn’t have to worry about production or even keeping finished goods – it can just focus on the sales part. It is also easier to pay suppliers, warehouse suppliers and partners for logistics and the last mile.”
Unfortunately, the SMB sector, which is set to benefit the most from the technology, is a bit on the waiting list.
“So far, blockchain has been used by several global banks as a letter of credit. Although there is a lot of talk around it, not much has been done. There is also some execution in retail and consumer-to-consumer contexts, but there is minimal adoption at the B2B level. Why? Because small businesses don’t get that kind of priority. Small businesses follow the traditional banking system, but no one has bothered to offer alternatives. It will take some time to bring businesses on board with the idea of blockchain, but it is very doable.
To encourage the widespread adoption of blockchain by SMEs, Clavis Fintech will launch its B2B blockchain payment platform, with the minimum viable product to be released in May, while the full platform will be released later this year.
“Clavis Fintech seeks to capitalize on the post-pandemic boom in entrepreneurship,” says Kabir. “We want to be an enabler for people finding new ways to make a living, especially with news of tech giants letting go of many of their people. The pandemic has also driven the rise of remote workers, also known as digital nomads. We want to provide solutions for them, because they are ignored by the banking system. Big banks want big customers, and small customers – such as those transferring $1,000 at a time or with $2,000 account balances – are expensive for them to maintain. Blockchain B2B payments can better serve SMEs, and we also believe that the contested space in B2B payments is huge, so Clavis Fintech wants to become one of the leaders in this area.”
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Name: Sandra Lee
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