The ease of making financial transactions and financial services generally had first been revolutionized when telegraph companies introduced wire transfers. However with the approaching of new age financial services, it is the time we address the question of the items the long run holds for the financial services around the globe.
Traditional Wire Transfers Let us begin by first taking a look at how everything has been going on of these past 150 years since wire transfers were first introduced. Transferring funds utilizing a wire transfer method via a bank isn’t a single step process however a multi-step process. It is just like this:
The sender approaches their bank and orders the change in funds to an account. Unique codes like BIC and IBAN codes are provided towards the bank by the sender so that the bank knows wherever the funds have to be transferred. The sender’s bank contacts the receiver’s bank by sending a message through a security system, it that the transfer needs to be made. The receiver’s bank receives this message, which includes settlement instructions too, and then asks the sender’s bank to transfer the amount specified by the content. The sender’s bank now transfers the quantity. This is not done in one go but piece by piece, therefore it may take anywhere from a couple of hours to a couple of days for the whole sum to become transferred. To help make the transfer, the 2 banks must have a reciprocal account with one another. If that’s incorrect, the transfer is created through a correspondent bank that holds such an account.
As you can easily see, this form of transfer relies overly on a mediator; takes additional time of computer should, and can end up being costly as the banks charge some fee for their service. Distributed currencies like Bit coin provide a viable alternative to this method.
Decentralized Currencies in Malaysia.
What sets services like Bit coin apart from traditional services is they don’t depend on a central mediator but instead operate using cryptographic protocols? The process is therefore faster, simpler, plus much more efficient. The machine is quite transparent to both customers too while traditional systems are inclined to fraud because of the complex process involved.
However, there is a downside to this too. With services like Bit coin, it is possible to trace a transaction to each unit value’s creation Solution? A Common Ground More and more people are choosing services like Bit coin and peer-to-peer mobile transfers, in whom a network operator may help users transfer funds by simply sending an SMS. Although they are indeed more effective, they’re quite a distance from global acceptance since there are many who still do not have accounts, as there is the problem of limited user identification in such services.