Simplifying Cross-Border Payments with Partior

Imagine trying to navigate a bustling highway with lanes constantly merging and diverging, toll booths slowing progress, and unexpected roadblocks causing frustrating delays. Just as on a congested highway, the journey of a traditional cross-border payment is riddled with obstacles. Each intermediary along the way acts as a toll booth, taking its cut and slowing down the transaction. With payment volumes projected to exceed $250 trillion by 2027, the scale of cross-border payments is truly staggering. However, despite its importance, cross-border payments face a number of pain points and can take several days to process, incur substantial fees, and leave businesses in the dark regarding the exact time of payment arrival. In the current economic landscape, there is a pressing need for cross-border payments to be faster, cheaper, and more transparent. 

This problem is particularly acute for small businesses and those in developing countries. Approximately $120 billion of transaction charges, excluding FX costs is being incurred annually on cross-border payments. The high cost of cross-border transactions is a result of multiple factors, including the involvement of multiple intermediaries, currency conversion expenses, liquidity costs, and compliance requirements. 

As an illustration, consider a scenario where a corporate entity in Thailand needs to make a payment to a recipient in Indonesia, the payment goes through multiple intermediaries, incurring additional costs along the way related to foreign exchange (FX) spreads and liquidity costs along the payment chain. Additionally, different cut-off times, processing speeds and compliance standards across the correspondent banks in the various jurisdictions contribute to further delays in the settlement process. 

Furthermore, the extended settlement cycles, which are often due to sequential processing among intermediaries, add to the complexity of cross-border transactions. Traditional payment infrastructures’ separation of funds movement and messaging exacerbates the reconciliation process, leading to delays and discrepancies that require manual intervention. 

Payment returns resulting from insufficient beneficiary information and lack of pre-validation incur additional costs, delays, and liquidity inefficiencies. Limited transparency and traceability of payment status make it challenging to track payments effectively. The absence of real-time payments hampers effective cash management and financial planning, particularly in a globally interconnected world where businesses operate round the clock. The limited operating hours and settlement windows of traditional banking systems create delays and inefficiencies. This means that payments initiated outside regular business hours may not be processed until the next day, impacting businesses cash flows and hindering trade.

‍Unified Ledgers and the Future of Money

Enter Partior - a unified ledger market infrastructure that integrates tokenised deposits, assets, and central bank funds on a programmable ledger. This unified ledger streamlines the settlement process for various financial instruments, ranging from commercial bank deposits to tokenised assets such as Wholesale Central Bank Digital Currencies (wCBDCs), securities, repos, and derivatives, by eliminating fragmented messaging and the need for reconciliation.

This unified ledger, accessible to all participants along the value chain, including settlement banks, participant banks, central banks, and commercial entities - offers numerous benefits:

• 24x7 Always On: Uninterrupted access for continuous clearing and settlements. 
• Atomic Settlement: Enables atomic, simultaneous settlements, eliminating settlement risks and streamlining the entire settlement process.
• Interoperable: Integrates seamlessly with various asset and currency networks, both digital and traditional to facilitate Payment vs Payment (PvP) and Delivery vs Payment (DvP) transactions and swaps.
• Programmable: Facilitates the programming of accounts with precise guarantees, allowing for rule-based execution and a high degree of automation.‍
• Composable: Supports the composition and execution of complex transactions based on programmable rules, reducing intermediary roles and fostering innovation, such as intraday FX Swaps.

Partior’s 24x7 global clearing and settlement solution enables real-time domestic and cross-border payments across banks. The platform enables programmable value transfers with real-time settlement finality that offers instant liquidity, transparency and overcomes shortcomings associated with sequential processing in legacy payment systems. The core benefits of Partior’s Global Clearing and Settlement solution include:

• 24x7 Multi-currency Real-Time Clearing & Settlement: This transcends cut-off times, empowering global financial actors to execute and settle payments without delay.
• Concurrent Pre-validation: By identifying discrepancies early, this feature ensures the reliability of transactions, safeguarding liquidity by preventing its commitment to flawed payments.
• Real-Time Settlement Finality Enables Instant Liquidity & Visibility: This feature guarantees instantaneous liquidity and visibility, maintaining a transparent payment trajectory from start to finish.
• Full Value Transfer to Beneficiary: The network supports no-deduct payments, ensuring that the beneficiary bank receives the full value, thus optimising the payment process.

By leaning into the capabilities that this solution provides, like 24x7 real-time settlement finality and increased liquidity, Partior continues to solidify its position as the global unified ledger market infrastructure for clearing and settlement, redefining the way money moves globally.

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“Partior's unified ledger enables decentralised market infrastructure, which breaks down existing silos to create a programmable and interoperable global settlement ecosystem. The platform's inherent programmability and high degree of automation enables 24x7 instant liquidity movement, precisely when and where needed. This reduces the need for liquidity buffers, freeing up trapped liquidity and enhancing efficiency and flexibility in liquidity management.” - Atul Bhuchar, Partior Head of Product.

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Decoding B2B Cross-Border Payments Infographic

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