Digital technologies have erased all the barriers to information exchange beyond borders, but impediments still exist in the case of monetary transactions. These hurdles in cross-border trade are particularly hindering the growth of the multi-trillion dollar e-commerce industry. Nevertheless, enterprises globally are finding a way around the roadblocks to cross-border trading by adopting the token economy. So, how is this going to change the face of e-commerce?
Challenges for Cross-Border e-Commerce
In a survey by the International Trade Center (ITC), 23% of MSMEs find the links between third-party e-payment service providers and local banks as a major obstacle to cross-border payments. As per Forrester’s report, cross-border shopping will account for 20% of global e-commerce market with sales worth $630 billion. On the other hand, the challenges with overseas payment solutions — including restrictions on payment methods, international bank transfers, limited transparency, and high costs, are restraining many e-commerce businesses from expanding to international markets.
Token Economy as a Boon
Though enterprises were once skeptical about adopting the token economy, the growing interest of governments, public institutions, and corporates across continents is opening doors for mainstream adoption of token-based transactions. Young startups like Nucleus Vision are building robust ecosystems with utility tokens like nCash at their core. These companies are connecting the end-users, e-commerce portals, and retail businesses in the ecosystem to create real-world use cases for their utility tokens.
Token economy has created a potential market for itself while solving the problems of cross-border traders. With no intermediaries and zero friction points, digital assets move across borders way faster than fiat money, fostering cross-border e-commerce. The beauty of utility tokens is that they run on foolproof blockchain networks, ensuring no room for fraudulent transactions.
The proliferation of active mobile internet users is fueling the rapid growth of the digital economy. However, high transaction costs in fiat-based cross border transactions are barring the majority of enterprises from expanding their horizons to new geographies. Token-based transactions are much easier on the pockets of enterprises as well as end-users as they reduce the number of intermediaries. Nucleus Vision and likewise startups are offering zero transaction fee services to bring more stakeholders into the parallel economy.
The token economy is still in its nascent stages. However, its potential for bringing financial inclusion to unbanked population creates a plethora of opportunities for cross-border trading, escalating the growth of the e-commerce industry, which is already said to be growing 250% faster than traditional retail.
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