by Fauzan Anandika
In this millennium, trading across the nation not only between countries or companies but right now it already becomes a personal transaction. Someone from Europe can buy handicraft directly from Asian craftsmen, or someone from Africa could work for an American company using an online working platform. And when the connection between countries occurs, the financial transaction will also follow. A transaction using a different currency becomes a regular activity for those who have a business with other countries. They use third-party service to manage their transaction, security, differences in currency value. A big company like PayPal and Western Union bring a great solution in helping us send and receive money from all over the world. The greatest thing is they can manage the transaction right to your bank account even they are not a bank. How could this possible? They use what it calls SWIFT code.
SWIFT code is a unique number consisting of several alphanumeric as a compulsory term to make an international money transfer. In the beginning, the SWIFT code designed to handle complexity in banking information exchange in the world. Society for Worldwide Interbank Financial Telecommunication, known as SWIFT, is an association that connects more than 9.000 securities agencies all over the world. SWIFT connect and help to provide financial information on many kinds of information for its member. SWIFT prevent financial abuse and crime during the transaction between their member. SWIFT creates code to identify banking institutions on various transactions to make every transaction eligible. Credibility to provide banking activity across the nation is the key to international trading and money transfer.
When we talk about international money transfer, there a new technology to do it with better security, cheaper cost, and easy tracking, something called Blockchain. There is 3 factor that enables blockchain technology to do better than bank institution in money transfer across the country.
- Faster and cheaper without a third party. A transaction using blockchain technology without a third party. By removing the third party means the money transferred in a shorter process. with less work to do means sending and receiving money will become faster and cheaper. In the transferring process, the blockchain user removed the third party role. Money is transferred directly with a unique code.
- Protected with transparency. Before Blockchain technology occurs, money transfers protected by the bank. We give the bank authority to do whatever it takes to protect the money and with some money to pay for the service. Now, transparency is the way to protect the transaction. Everyone has the right to access the transaction, and the process is immutable. Nobody can change the transaction history. That is the reason why transferring cryptocurrency doesn’t need an additional fee but still save to do.
- Traceable without editing. Fraudulence and corruption happen because an unauthorized person can change the transaction history. Embezzling customer money, nobody knows until police investigation. When a transaction becomes a permanent record, it will harder to manipulate the financial report. Blockchain creates an append-only system to create an anti-fraud atmosphere. This system creates systematic security and makes every transaction easy to track. Government or auditor easily tracks by following where the money flow, even a person can do it.
Trusting an algorithm can be scary for some people since not everyone knows how the algorithm works. Some people still can do a bad thing and create a manipulative algorithm to deceive us. With this situation, we still depend on the bank to protect our transactions while updating the system with new technology.