Development of a Blockchain-Integrated Micro-Transaction Engine for Cross-Border Payments

Cross-border payments remain constrained by high transaction costs, latency, and the lack of interoperability among financial systems.Traditional correspondent banking networks depend on multi-tiered intermediaries, resulting in slow settlements and limited transparency.This study presents the design and development of a blockchain-integrated micro-transaction engine (BIMTE) for secure, real-time, and low-cost international payments.The proposed engine combines a Layer-2 blockchain architecture with an AI-driven transaction routing algorithm to optimize payment flow across digital ledgers.The system integrates smart contracts, offchain scaling, and tokenized fiat representation to support micro-transactions below $1 while maintaining compliance with ISO 20022 standards.A hybrid consensus protocol incorporating Proof-of-Authority (PoA) and Byzantine Fault Tolerance (BFT) mechanisms was implemented to achieve sub-second confirmation times.The prototype was evaluated using synthetic transaction data from remittance corridors between the United States, Nigeria, and the European Union.Results demonstrate a 65% reduction in transaction fees, 42% faster average settlement times, and 99.8% integrity retention across stress-tested loads of up to 25,000 transactions per second.These findings establish the feasibility of blockchain-based micro-payment systems as viable alternatives to conventional clearing houses.The study concludes that integrating distributed ledger technology with adaptive AI routing and smart escrow mechanisms can transform cross-border payment infrastructures by enhancing speed, scalability, and regulatory transparency.