| Payment Mechanism | Settlement Latency | Avg Friction / Bps | Total Annual Cost | Working Capital Lag | Chargeback / Counterparty Risk |
|---|
Institutional Modeling Methodology & Assumptions Expand Documentation ▾
1. Legacy Rail Cost Breakdown: Domestic wires are modeled at $25/inbound transfer plus 15 bps intermediary charges; cross-border SWIFT transfers average $45 plus the configured FX spread (e.g. 120 bps). Corporate card acceptance is assumed at 2.45% blended interchange where applicable.
2. Working Capital & Float Release: Traditional cross-border settlements incur a 3-day float window (T+3) between invoice authorization, correspondent clearing, and credited balances. Institutional stablecoin rails settle in minutes (<10 seconds on supported L2 networks). Released working capital equals: Float Released = (Annual Inbound Volume / 365) × 3 Days.
3. Float Yield: Overnight interest unlocked by sweeping released capital into high-quality liquid assets (HQLA) or overnight Treasury repo rates (SOFR): Yield Unlocked = Float Released × SOFR Rate.
4. Dispute / Fraud Reduction: Cryptographic on-chain settlement provides finality without 90-day chargeback windows, eliminating fraud dispute reserves typically held by merchant acquirers.