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Simplifying Global Payments by Unlocking Trapped Liquidity

Giving purpose to "Dead Money" by eliminating dormant accounts.

In an age where information and innovation flow across borders with lightning speed, it's surprising that the world of global payments remains mired in inefficiencies. The need for a new payment system that prioritises global liquidity as an essential element of each transaction is long overdue. The current financial ecosystem requires financial institutions to maintain substantial liquidity in other countries, banks, and currencies through nostro and vostro accounts, which has led to the industry term "dead money." More than $27 trillion are locked in these accounts according to McKinsey report. However, there's hope on the horizon. In a world where time is money, at PayNetX we aim to revolutionize cross-border payments by eliminating the need for these dormant accounts.

Understanding the Problem:

To appreciate the significance of PayNetX, we first need to understand the problem it's addressing. In our recent surveys with over 40 financial institutions, common challenges have emerged, including:

Slow Settlement: While the terms Real-Time payment is often used in the industry, the reality is that the term Real-Time Settlement does not exist and there is a big difference between the two. Cross-border transactions often take days to settle, causing frustration.

High Operational and Transaction Costs: The legacy systems come with substantial operational costs related to compliance, reconciliation, and fraud prevention. Transaction costs can be exorbitant, especially for businesses involved in daily cross-border transactions.

Limited Access to Global Liquidity: Access to global liquidity can be a daunting task for financial institutions, making it difficult to meet the demands of clients and navigate the dynamic markets efficiently.

Nostro/Vostro Accounts: To facilitate international transactions, banks often maintain nostro and vostro accounts, which means holding idle funds in foreign banks. These "dead money" accounts serve no productive purpose and tie up precious capital that could be deployed more effectively.

Lack of Real-time Intraday Liquidity Management Data: The absence of real-time intraday liquidity management data creates transparency issues, leaving financial institutions in the dark regarding their liquidity status.

The Solution:

PayNetX emerges as a beacon of hope in the global financial ecosystem, offering its UPL (Unique Private Ledger) approach to revolutionise global payments by utilising the power of distributed ledger technology properly.

As a Global A2A (Account-to-Account) Payment infrastructure, the solution is poised to Unlock Dormant Liquidity by eliminating the need for nostro and vostro accounts, enabling financial institutions to deploy previously locked capital in these accounts more efficiently and profitably.

The Global Impact:

The importance of such infrastructure is not just about transforming payment systems; it's about empowering businesses and economies. The current high costs and delays in cross-border transactions affect not only financial institutions but also small and medium-sized enterprises (SMEs) that are the backbone of any economy. For these businesses, even small differences in transaction costs can make a significant impact on their bottom line.

In a world where the flow of information and money should be as seamless as possible, the reliance on nostro and vostro accounts seems like a relic of a bygone era. PayNetX presents an opportunity to bring global payments into the 21st century by eliminating the shackles of "dead money" and inefficiencies in cross-border transactions. As this innovative solution gains traction, we can anticipate a world where cross-border payments are not only faster and more cost-effective but also aligned with the pace of our ever-advancing digital age. The future of global payments is brighter.

PayNetX is a Global A2A payment infrastructure, specifically designed to tackle the above pain points from financial institutions perspective.

Financial institutions worldwide are getting excited for several reasons:

- It eliminates the need for nostro and vostro accounts, saving financial institutions tens of millions in management fees;

- It unlocks previously trapped funds, amounting to billions;

- It provides access to global liquidity;

- it provides real-time intraday liquidity management data;

- Significantly reduces operational costs;

- It reduces transaction costs by up to 80% compared to legacy systems;

- It reduces global settlement time from 1-5 business days to an astonishing 1-2 seconds, regardless of location or currency pair.

- lastly but most importantly, it can solve the problems in today’s financial markets without waiting for CBDC’s to be launched, which may take many more years.

As we’re preparing our very first market report “From Dashes and Dots to Zero’s and One’s – The Evolution of Cross-Border payments” We’d love to hear your thoughts. Please feel free to send us a direct message to (financial institutions only) if you're interested in participating or have any questions.

Your expertise matters and your thoughts will contribute significantly to the collective knowledge of our industry.

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