In today's rapidly evolving digital economy, emerging markets are increasingly becoming key players in the global workforce. Freelancers, creatives, and gig workers across Africa, Latin America, and Southeast Asia are accessing work opportunities across borders like never before.

Yet, one major barrier persists: getting paid. Traditional cross-border payment systems, plagued by high fees, slow processing times, and currency fluctuations, are often more of a hindrance than a help.

A study carried out by Zerohash discovered that average, 48% of freelancers believe it takes too long to receive payments while 49% believe the fees charged by existing payment channels are too high. 58% of the respondents believed that their local banking channels didn't work for them.

At PaydHQ, we’re addressing this challenge head-on by building cross-border payment flows that not only enable faster, cheaper, and more transparent transactions but also unlock the potential of stablecoins as a transformative solution.

Specifically, by utilizing cUSD as a dollar alternative and cKES, a local stablecoin pegged to the Kenyan Shilling ,both built by Mento Labs, Payd is creating a seamless foreign exchange system that simplifies cross-border payments for emerging markets.

The Challenge with Traditional Crossborder Payments

Crossborder payments for freelancers, small businesses, and gig workers are fraught with challenges. For workers in emerging markets, receiving payments from international clients usually means navigating slow, expensive, and often opaque financial systems.

Some key issues include:

• High Transaction Fees: Traditional wire transfers, services like PayPal, and even remittance providers often charge anywhere from 5% to 10% in fees, which is a significant portion of many gig workers' earnings.

• Slow Processing Times: Crossborder transactions can take several days or even weeks to settle, delaying workers' ability to access their earnings.

• Currency Fluctuations: Payments received in foreign currencies expose freelancers to currency exchange rate fluctuations, which can erode the value of their income when converting to local currencies.

• Limited Access to Financial Infrastructure: Many freelancers in emerging markets lack access to robust financial services like bank accounts or international payment gateways, which further complicates their ability to receive funds.

These challenges not only make it difficult for freelancers and businesses to manage their cash flow, but they also limit their ability to compete on the global stage.

Stablecoins: A Game-Changer for Crossborder Payments

Enter stablecoins—cryptocurrencies pegged to the value of traditional currencies like the US dollar. Stablecoins solve many of the issues inherent in traditional crossborder payments. With stablecoins, payments are fast, cheap, and not subject to the volatility that plagues other digital assets like Bitcoin or Ethereum.

At Payd, we’ve embraced stablecoins, specifically cUSD and cEUR, to streamline crossborder payments. cUSD and cEUR are stablecoins who's values are pegged to the US Dollar and Euro respectively to ensure its stability. By leveraging these stablecoins, Payd allows freelancers and businesses in emerging markets to receive payments globally without the friction of traditional banking systems.

The benefits of using cUSD and cEUR include:

• Low Transaction Costs: Stablecoins drastically reduce transaction fees, often bringing them down to less than 1% of the transaction amount, compared to traditional methods which can charge up to 10%.

• Faster Settlements: On-chain stablecoin transactions settle in minutes, not days, allowing users to access their funds almost immediately.

• Stable Value: As they are pegged 1:1 to the respective fiat currency, recipients can avoid the value erosion associated with currency fluctuations.

Payd users are able to receive direct stablecoin payments as well as fiat payments converted to stablecoins for fast and seamless settlement.

Local Stablecoins: Bridging Global Payments with Local Economies

While stablecoins solve many of the challenges associated with crossborder payments, there remains a need to bridge global transactions with local economies.

This is where local stablecoins come in.

For example, at Payd, we are working with cKES, a stablecoin pegged to the Kenyan Shilling backed by a diverse reserve portfolio. This local stablecoin allows users to seamlessly convert their cUSD and cEUR earnings into KES (Kenyan Shillings) on-chain, providing a smooth experience for workers in Kenya and beyond.

Here’s how local stablecoins like cKES are simplifying payments in emerging markets:

• Localized Spending: By converting cUSD and cEUR into cKES, users can spend their earnings in the local economy without needing to rely on traditional banks or high-fee foreign exchange services.

• On-Chain Foreign Exchange: Users can now manage their foreign exchange needs entirely on-chain, eliminating intermediaries and delays. This is particularly useful for freelancers who often need to exchange currencies when receiving international payments.

• Immediate Liquidity: Once converted into cKES, users can spend their funds directly at local merchants or withdraw them to mobile money services, giving them immediate access to liquidity.

The goal here is to simplify how freelancers, creatives, and entrepreneurs get paid globally and spend locally without going through the hassle that comes with traditional foreign exchange.

How Payd is Simplifying Onramping and Spending Stablecoins

To bring this vision to life, we’ve built a robust infrastructure that simplifies how users in emerging markets onramp to stablecoins, manage their earnings, and spend them locally. Here's how:

1. Onramping Fiat to Stablecoins:

   • Users can easily convert their local currencies (like KES) into cUSD and cEUR within their Payd Wallets. Payd partners with different providers to ensure that users can deposit funds from mobile money or bank accounts and seamlessly convert them into stablecoins on-chain.

   • We also provide an offramp feature, allowing users to convert their stablecoins back into local currencies when needed, making the transition between digital and fiat currencies smooth.

2. Spending Stablecoins Locally:

   • Once users receive their earnings in cUSD and cEUR, they can convert them into local stablecoins like cKES and spend them directly via local channels such as mobile money, bank transfers, or merchant payments. This removes the need to rely on traditional currency conversion services or banks.

   • Through partnerships with payment platforms and service providers such as Fonbnk and Quikk, Payd enables users to spend their stablecoins at local merchants or withdraw funds directly to their mobile wallets.

3. Partnerships for Local Access:

   • Payd is partnering with key players in the local payments ecosystem to provide users with more spending options for their stablecoin earnings. These partnerships ensure that users have access to liquidity in their local economies without needing to convert back to fiat, streamlining the payment experience.

The Future of Crossborder Payments with Stablecoins

At Payd, we believe that stablecoins are the future of cross-border payments, especially for emerging markets - painless global payments, and seamless local spending.

Our mission is to empower the gig economy in emerging markets by providing fast, affordable, and reliable financial tools that allow them to compete on a global stage. With stablecoins as a core part of our solution, we’re bridging the gap between local and global payments, making it easier for our users to get paid and thrive.

As we continue to build out Payd’s platform, we remain committed to simplifying financial access for emerging markets and creating a seamless experience for all users—whether they’re receiving payments from across the world or spending their earnings in their local economies.

If you'd like to chat about what we are building, reach out to me via email at ben@paydhq.com

About the Author

Benaiah Wepundi is the Founder and CEO of PaydHQ, a platform dedicated to providing financial services for freelancers and creatives in emerging markets. He is passionate about leveraging blockchain technology and stablecoins to create efficient, accessible crossborder payment solutions.