Improving Cross-Border Merchant Payments with Stablecoins

Crypto stablecoins have the potential to greatly improve the movement of money across borders for merchants involved in cross-border trade. However, traditional cross-border payment methods such as wire transfer through the SWIFT network, are still used for transfers despite its many problems. Let's take an example of an importer in the US who wants to pay 10,000 USD via Bank of America to an exporter in Vietnam who has a bank account in Orient Commercial Joint Stock Bank via wire transfer to understand the process, fees, and time associated with such transactions.

The importer would need to go to a Bank of America branch and initiate the wire transfer, specifying the recipient's bank information in Vietnam, including the bank name, bank address and the recipient's account number. The bank would then send the money through the SWIFT network to the recipient's bank in Vietnam (Orient Commercial Joint Stock Bank).

The fees associated with this transaction would depend on the specific details of the transfer, such as the countries involved, and the currencies being exchanged. According to Bank of America's website, the fee for an international wire transfer ranges from $16 to $45. Additionally, the Orient Commercial Joint Stock Bank may charge a fee for receiving the wire transfer, this fee should be verified with the bank.

The time associated with this transaction can vary, depending on the banks, the countries involved, and the time of the transaction. Typically, the transfer can take anywhere from 1 to 5 business days. According to Bank of America, the estimated delivery time for an international wire transfer is 3 business days.

In terms of the FX rate between USD and VND currencies, the rate fluctuates in the market and can be affected by many factors. As of today, the FX rate is around 23,200 VND for 1 USD. But the banks will not offer this FX rate to their customers So, 10,000 USD sent from the US would NOT be equivalent to approximately 232,000,000 VND.

In conclusion, while traditional cross-border payment methods like wire transfer through the SWIFT network are still widely used, they can be slow and costly, with high bank fees and long transfer times. The importer in the US would pay 10,000 USD via Bank of America to an exporter in Vietnam who has a bank account in Orient Commercial Joint Stock Bank via wire transfer, with a fee range between $16 to $45, an estimated delivery time of 3 business days and an FX rate that varies from bank to bank to VND for 1 USD. Additionally, it's worth noting that the recipient's bank in Vietnam (Orient Commercial Joint Stock Bank) may also charge a fee for receiving the wire transfer.