Today, The Interledger Foundation, a group that creates and promotes an open, interoperable payment network, and Chimoney, a fintech business that offers multi-currency wallets and cross-border payment infrastructure, announced their efforts to facilitate cross-border payments between more than 130 nations globally.
When combined, they will allow users without bank accounts to send and receive money through digital wallets that operate without a bank account and to quickly convert that money into any combination of established and new payment methods. Businesses and individuals will be able to avoid paying large bank fees, exchange rates, and other transaction costs that are typically associated with sending and receiving money internationally. This includes freelancers, remote workers, and recipients of cash-based transfers (CBT).
Cross-border payments are essential for a lot of companies and employees. For example, there are currently over 1.5 billion people in the global freelance economy, many of whom work abroad to support themselves. However, the options available for sending and receiving money internationally are still mostly restricted to conventional financial systems that demand official bank accounts, come with high transaction fees—up to 12%—and lengthy wait times. People without bank accounts must pay extra in areas where traditional banks are scarce to convert their money into digital alternatives like airtime and Mobile Money, which they can then use to exchange money using their mobile phone number.
Chimoney and the Interledger Foundation will work together to enable cross-border payments in more than 130 nations. Payments through Chimoney’s Payment Infrastructure will be powered by the Interledger Foundation’s Interledger Protocol (ILP), an open, neutral protocol for exchanging money, and its Rafiki software. These two companies will enable businesses to send international payments to any phone number or email promptly and without charging fees to the end user at a fraction of the cost of current systems. Additionally, users will be able to convert payments from Chimoney’s digital wallet into their preferred currency and send free local and cross-border payments to other digital wallets in the Interledger network. This covers regional choices like the USD, CAD, and M-PESA in Africa, as well as non-traditional payment methods.
Early pioneers in the cross-border payments space have made headway in bringing cross-border payments to individuals with bank accounts, but don’t serve those without them. Current offerings are also limited in terms of the countries and currencies they support, and payments usually take anywhere from one to three days, rather than hitting accounts instantly.
“At Chimoney, our mission has always been to break down financial barriers and enable universal access to financial services,” notes Uchi Uchibeke, Founder and CEO, Chimoney. “Our partnership with the Interledger Foundation is a monumental step in this journey. These advancements will democratize access to financial services, just as the internet democratized access to information.”
Recognizing the challenges that come with facilitating payments in multiple international markets—each with their own unique regulations—Chimoney’s ready-to-implement API gives companies the ability to embed cross-border payments into their offerings quickly, with regulations and compliance already built in.
As a recipient of Interledger’s Digital Financial Services grant program, aimed at growing interoperable payment capabilities across global financial infrastructures, Chimoney is one of several companies paving the way toward a new standard for open-source financial inclusion worldwide.
