How Blockchain is changing the payment industry
At this point, it's already well known that cryptocurrency has changed the way we pay for goods and services, thanks to the Blockchain. What isn't so well known is how Blockchain will become superior to fiat, credit cards, and even the whole SWIFT system. Let's take a look at a few examples:
Cybercrime has become a plague to the internet over the last decade and analysts are predicting over $6 trillion in losses to be incurred by 2021. (Hamilton, 2018) Payment processors hold a lot of responsibility when it comes to protecting your personal data. Blockchain tech can help keep your information safer by recording amounts, account profiles, agreements, and more. Essentially, the information can remain confidential to you, while serving as proof to verify a transaction.
2. Cross-border Payments
Today, it sometimes feels as if the global economy is regressing. Cross-border payments can be highly cost prohibitive due to exchange rates and third-party verification fees. While these fees can be troubling for corporations, they can be debilitating for an individual attempting to send funds internationally to friends or family. (Hamilton, 2018) With blockchain, a peer-to-peer system is created that eliminates the need for a third-party. Regardless of the transaction amount or where it's going in the world, blockchain tech dramatically decreases these fees and makes global commerce more affordable.
3. Point-of-Sale (PoS)
While blockchain tech can solve global issues, it can also resolve local ones. Most PoS systems for merchants suck a hefty percentage out of profits that a business never gets back. On top of that, it doesn't prevent credit cards from declining on a regular basis or even come with decent customer service. Blockchain-based solutions can allow you to accept payments for less than 1%, putting more money back in your pocket. You also don't have to worry about payment outages (such as the recent one Visa had that created a continental payment-blackout in Europe).
4. Transaction times
Lastly, blockchain tech overall boasts the fastest transaction times in the world. For example, Ripple (XRP) can send value anywhere in the world in 2 seconds; Stellar Lumens (XLM) in 4 seconds. While these speeds are already record-setting, they are only the beginning of what this technology will bring us in the next decade. Using the wonderful SWIFT system (yeah, that was sarcasm), it will take you a couple days to send money from one bank to another. In this category, blockchain is clearly superior.
These examples serve as a good reminder that investing into Blockchain projects that are focused on the payment industry are a good bet for the future. Some are more centralized (i.e. Ripple); Others are decentralized and rely on open source development (i.e. Ethereum, Litecoin, Dash, Stellar Lumens). What matters in the end is the technology, and I would bet that all these projects excel in the future as they reshape the payment industry.
I would like to thank CoinCentral.com for allowing us to reference one of their original articles in the creation of this article.
Link: Original CoinCentral.com Article
Link: Visa Outage in Europe
Reference: Hamilton, David. The Payment Industry is a Business Model Blockchain Will Upgrade. 11 June 2018.