The Sydney Morning Herald runs an article that asks this question: Why do Electronic Transfers take So Long? The article is about the lag time it takes for electronic money transfers to move when we live in an interconnected world. The article mentions the technology that Klickex already has in place and we have mentioned here many times. Below are some quotes from the article and then an added comment.
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"On paper, it seems ridiculous. You send some money via electronic banking and the transaction apparently goes into limbo – overseas payments can be especially slow, reaching intended recipients after up to five business days, which can effectively mean a week."
"The chief currency strategist at the global payments provider OzForex, Jim Vrondas, blames the frustration on the global transfer network: the ill-named SWIFT (Society for Worldwide Interbank Financial Telecommunication). Banks rely on SWIFT, which in turn counts on intermediary banks. So moving money from a bank account here to another abroad can see funds handled by up to four banks, according to Vrondas."
"The co-founder of the personal finance app Pocketbook, Bosco Tan, also argues that the cause of delay is technical – the result of the need for processes to be underpinned by clearing houses that authorise end-of-day transfers between banks in bulk."
"But, he says, times are changing. He points to how the Reserve Bank of Australia is investing in a real-time banking system. The new system – scheduled to be fully implemented by the end of 2016 – will make institution-to-institution transfers real-time, Tan says, adding that many commercial entities are trying to pep up the payment process, too."
"Another, new service Tan cites, the New Zealand-owned KlickEx, is building a boundary-busting peer-to-peer solution. Touted as a community exchange service rather than a bank, KlickEx lets you move money to family and friends in any of five currencies including the pound, the Australian and NZ dollars. Four more, the Euro, Hong Kong and US dollars and the Japanese Yen are planned."
"Transactions happen in real time, free of charge – you avoid paying bank fees because you are dealing with people like yourself, KlickEx says, adding that it makes money from its premium services. Tan credits the start-up with asking why standard worldwide transfers take longer than international flights."
Read more: http://www.smh.com.au/money/planning/why-do-electronic-transfers-take-so-long-20140821-106v32.html#ixzz3DbMH6Bmd
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My added comment:
This article focuses on the existing technology that Klickex has been using for some time now in the South Pacific. Here, we are following the progress of a new technology that Klickex will be implementing in the coming months. This is a new asset backed currency (Klickex calls it the GSD for Global Stability Dollar) that is intended to increase stability in foreign currency exchange.
Klickex already allows its users to transfer funds on a mobile device in real time. It already allows users to do a currency exchange in real time if need be to complete the transfer. The obvious logical next step is to provide a currency unit intended to provide a stable store of value that can be accessed, converted to local currency, and transferred in real time on a mobile device or on the internet with a home computer. The goal being to reduce or eliminate foreign currency exchange rate risks for users.
Klickex has spent a lot of time and effort working with the banking system to meet its needs in this area and to do so without sacrificing safety and security of the funds for users. The banks also need to make sure that such rapid funds transfers are not abused and meet regulatory standards for anti money laundering, etc.
As we get information on the progress of this new currency technology, we will post it here.
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