10 July 2020
Blockchain Technology facilitates a secure, fast, cost-effective, immutable features through encrypted distributed ledgers that without the intermediaries verifies a real-time transaction. Blockchain technology was initially used for digital currency such as Bitcoin but with the exposure, it had led to the application of the technology in various streams. A Blockchain-Powered Payment Industry could be defined as a concept wherein the technology of Blockchain is utilized in Payment Industry. Companies such as AirFox, Circle, ZCash and so forth use the Blockchain technology for transactions.
Blockchain technology for the payment industry would improve the process and be an exploration of new opportunities that could help in building effective and robust to the firm.
The key components of this technology for the payment industry is the decentralized network, the versatile application, transparency, security over data, faster processing, detailed audit, and gain customer satisfaction.
Application of the blockchain technology would help lessen and accelerate the cost of trading finance as at present it entails high costing, maintenance, and is time-consuming.
Various kinds of transactional intermediary fees or charges such as transactional fees, processing fees, scheduled fee, etc. will be reduced and cut away.
It will also ease things for the merchants as the convenience bill along with the high processing fees has been downhill for them.
Since blockchain technology is decentralized it would provide an alternative low fee digital payments network that would help the merchant to save the processing fee and experience the elevation of service.
Blockchain-powered payment methods would also make international transactions or cross-border payments comparatively effective as the users will be allowed to transact with ease whenever and wherever in the world.
Adoption of blockchain payment processing would also benefit the supply chain participants causing to increase the efficiency, liquidity, and automation in the supply chain.
A blockchain-powered payment industry would facilitate with instant and diverse tools to utilize the cryptocurrency assets that would hence improvise the liquidity and reduce the liability.
Blockchain technology being decentralized could also be used in smart contracts as it is stored, replicated and supervised in the network. It will help avoid the lawyer fees, legal fees, lengthy paperwork and so forth.
A lot of businesses are utilizing IoT for operations, wherein Blockchain can work with IoT to help trace histories of payments and fill-in invoices and payments automatically.
Numerous companies are unwilling to work with Blockchain technology by means of cryptocurrency due to its coins trading price, the fluctuations in the market, and the risk of money laundering and fraudulence.
Volatility in the stream is the major concern that is putting off the industry as the volatility is unpredictable and could be frequent which means that it would require a lot of guesswork which no one in the business wants to seesaw with.
The payment method has to be as accessible as Google Pay or Apple Pay which is one of the reasons why it hasn’t disrupted the industry as much yet.
The scarcity or the availability of the usage of the technology and its related components is also a drawback for the exposure and use of the network.
The Blockchain technology is complex and not user-friendly. Many people would lay back due to the lack of familiarity with the concept and practicality of the technology.
For Blockchain to be used by the industry, consensus from all the branches is needed and beneficial which at present is uncalled.
Here are few additional information about Blockchain-powered payment industry:
Companies like IBM, Visa, Mastercard are already working or in the process of working the blockchain system to enhance their operations and components related.
Well known banks such as Deutsche Bank and HSBC Bank have conducted or in the practice potential to utilize cross-border transactions and security.
Stellar, Ripple and IOTA designed to the requirements of reducing the scalability and practicing cost-effective payment system are emerging as well.
According to Citi Research Report, in Kenya, BitPesa is using the technology between African countries to not having to count on an inefficient local bank.
The World Economic Forum gave a statistical estimation that the GDP of 10% of worldwide will be stored utilizing the Blockchain technology by the year 2027.
“I think you're starting to see a growing consensus,” “I do quite a bit of FinTech and I can tell you my clients- the banks, are inherently conservative, at least the large ones. But once they see other banks adopt new technologies, you see it snowball. Other banks will often join on in pretty quick fashion."Hence, despite the major side of the benefits it is yet to be prevalent. Just like the pros and cons, Blockchain to be powered for the Payment Industry throughout will be in greys for the time-period