The demand for remittance payment has increased through the global economy’s advancement in cross-border business and expenses. According to the Pew Research centre, In 2017, over $148 billion was paid in remittance from the U.S to foreign countries.
Remittance payment is a payment fee paid for acting as an intermediate between two parties to transfer money. Immediate fund transfers are made for international transactions. Numerous remittance payment methods are emerging as the demand for remittance payment increases.
Venmo, a mobile payment application, takes the remittance payment method a step ahead by integrating with Stellar – a distributed ledger technology.
What is stellar?
Stellar is a distributed ledger technology that allows fast and efficient cross-border financial services. Stellar will enable you to transfer cryptocurrencies to fiat currency. It is built by following the Stellar Consensus Protocol (SCP), which paves a way to reach a wider network than depending on the closed systems. The goal of stellar is to provide efficient, and low-cost transactions.
Stellar links bank accounts and other payment systems to integrate with the platform to offer financial transactions at no cost. The Stellar blockchain has a decentralized and transparent ledger, with a low transaction rate that allows 3–5 seconds of confirmation time.
Benefits of stellar:
- Offer a peer-to-peer network.
- Consumers can have direct contact with each other.
- Handle multiple Assets.
- The transactions are automatic and cost-efficient.
Stellar core :
The Stellar Core software maintains the communication of the Stellar network. The stellar consensus protocol (SCP) validates the transaction in the network.
Stellar Core is open to run by anyone, as it is similar to running an Ethereum or Bitcoin node.
Horizon is a RESTful API that allows you to interact with Stellar Core using HTTP clients like cURL, Postman, or Paw, enabling you to build applications using the stellar network.
The Mechanism of Stellar blockchain for Cross-Border Payments:
Suppose a user from the United States wishes to transfer funds in USD to another user in Europe that accepts EUR. If both accounts are anchored with the stellar networks, and you have initiated the payments to a user in USD, it checks the European account’s compliance. With the European government’s approval, it will withdraw funds from your government account and redirect them to the Lumens stellar network that credits money in a European bank account.
The stellar blockchain network is a transparent and open ledger that allows the user to track corresponding accounts’ transaction details. The unique feature of stellar blockchain is Anchor.
Role of Anchor :
Anchor connects multiple currencies within the stellar network to keep the deposits and offers credits to the users. Every transaction in the stellar network is made in the form of credits issued by the anchor. The support of an anchor is necessary for transactions and other operations. The anchors play a prominent role in the stellar network by offering smooth operational procedures.
Here Venmo, the payment app, acts as an anchor to exchange the digital assets in the stellar network.
You must create a stellar account to connect with the stellar network. To create an account, you should deposit the lumens in the stellar network. The public key and Private key will be provided once the account is created. The public key serves as an account and the private key acts as a password for the account. The user must insert the password for every transaction.
Benefits of stellar blockchain:
P2P payments app:
Building a P2P payments app in stellar blockchain technology allows faster cross border transactions with low remittance fees.
Building Decentralized Exchanges:
Stellar DEX allows you to take full control over your currency, unlike centralized banks or smart contracts that hold your currency. This prevents the central servers and smart contracts from hacks that risk your money.
Investors started to invest in crypto assets, which changed them from investing in traditional assets to digital assets. An increase in the adoption of digital assets is reflected in the blockchain/crypto adoption. Asset digitization tools such as slice are available in the stellar network.
Enables the Sharing Economy:
The stellar network enables the development of financial systems that generates revenue for the service providers. For example, for sharing hotspots for other users, the stellar network’s financial system generates income for the service provider.
Blockchain App factory offers multiple app development services in blockchain technology. Our DeFi app development
services experience explores innovative DeFi products that bring meaningful changes to the traditional financial system.
Join us to develop a payment application like Venmo that enables us to integrate with a stellar network to make cross-border transactions at low remittance costs and boost your revenue. Our technical experts are ready to serve you a 24/7 support for your entire app development cycle.