The ECB Working Paper, No 2693 / August 2022, by Ulrich Bindseil, and George Pantelopoulos, named "Towards the holy grail of cross-border payments"summarizes the problem as follows:
"The holy grail of cross-border payments is a solution that allows cross-border payments to be
(1) immediate,
(2) cheap,
(3) of universal reach, and
(4) settled in a secure settlement medium, such as central bank money.
The search for the holy grail has been ongoing for many centuries. In 2020, improving cross-border payments was set as a key priority by the G20: the G20 asked the Financial Stability Board (FSB), working with the Committee on Payments and Market Infrastructures (CPMI) and other standard-setting bodies to co-ordinate a three-stage process to develop a roadmap to enhance
cross-border payments ... and after more than a thousand years of search, the holy grail of cross-border payments can be found within the next ten years."
This post outlines TRIO's breakthrough, regarding Cross-Border Payments for Online Trade which allows you to Buy/Sell anywhere in complete confidence free from theft, fraud, and money laundering.
In the nutshell - TRIO is a cross-border online service that includes the following components:
Exchange (for Buyer and Seller local digital currencies),
Remittance (theft-free and fraud-free),
Escrow (enabling trust between Buyer and Seller),
Dispute resolution (with a money-back guarantee).
It involves the following steps:
an advance payment to Escrow,
notification of credit to the Seller,
documentary evidence of delivery to the Buyer,
and dispute resolution between the Buyer and the Seller.
1. Cash-in-Advance
This presents the least risk to the Seller while having the most risk to the Buyer.
Therefore we need to eliminate this risk via Escrow. The International Trade Administration’s Trade Finance Guide (TFG) says an escrow service is a cash-in-advance option available to sellers and buyers that reduces the potential risk of fraud. It acts as a trusted third party that collects, holds, and disburses funds
2. Notification of Credit
It is a message from an Escrow guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount.
3. Documentary Delivery
In a documentary collection process, the seller instructs the Escrow to forward documents related to the delivery of goods to a buyer’s address.
4. Dispute resolution.
If the goods were returned to the Seller in accordance with a sales agreement, the TRIO service will enforce a money-back guarantee for the Buyer.
In Summary
TRIO goes well beyond the ECB White Paper, providing not only cross-border payments but enabling the full online trade cycle.
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