I think this comparison of international payment costs is pretty cool:
But also, international payment timings!
What’s missing from that image is how long each of those payment mechanisms takes to clear:
- Credit cards are fairly instant;
- Bitcoin payments can take anything from a few minutes to a few days (if the payment doesn’t get lost), depending on the volume of transactions in the processing queue;
- Bank transfers (EFTs) will usually take 3 to 5 working days (see here for why).
It’s possibly the thing about digital currencies that I find the most exciting. It’s not the alternative asset class, or the decentralised nature of the network itself. It’s the fact that you can organise an international payment incredibly quickly.
And that type of competition might well force the international banking system to up its game.
Because why can I send an encrypted email anywhere instantly, but a wiring instruction (which might have even less technical data within it) requires 3 to 5 working days to clear?
Rolling Alpha posts opinions on finance, economics, and sometimes things that are only loosely related. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha. Also, check out the RA podcast on iTunes: The Story of Money.