The e-commerce payment space is quickly evolving. Alternative and mobile payment methods are on the rise and are giving the existing methods a run for their money.
In 2019 where mobile payment revenues are projected to exceed a trillion dollars worldwide. The same year will see over 2 billion consumers preferring mobile payment. The changes have raised questions regarding the convenience, speed and security of these payment methods. And when it comes to these three issues, Blockchain is already a favorite.
There is no doubt Blockchain is fast becoming a preferred apparatus for digital transformation across various sectors. The application of the technology in payments has been particularly remarkable. However, when it comes to fully accept Blockchain as a payment means, merchants have traded the matter with caution. But the fire hasn’t dimmed on the Blockchain ledger technology.
Disruption Of E-commerce
The distributed ledger technology comes as a solution to the problems riddling the traditional e-commerce for years. Problems with intermediaries, the sluggishness of systems and their susceptibility to error are solved by the fact that the technology is decentralized. The technology also offers its consumers more transparency and security in their transactions.
These unique benefits make it hard for Fintechs to ignore Blockchain even in the presence of alternative payment methods and payment security technologies.
Cost Of Transactions
The traditional processing fee for a payment ranges from flat ranges to percentages of the total transaction, sometimes a combination of both. In the Blockchain space, these imposed costs are eliminated entirely.
The transparent value for Blockchain allows the possibility of e-commerce platforms to incentivize good behaviors by awarding consumers with a trust score. This trust score is much like the credit score and is based on the number of smooth transactions completed.
Blockchain technology could also eliminate other costs associated with upgrading and maintaining the payment systems. The fact that the technology aggregates payment processing, product management, inventory databases and operational systems in one place means cut costs in maintaining each of these systems.
Security Of Investment And Data
The current emerging payment methods have their vulnerabilities. Securing not just payments but customer’s sensitive data has become a bit complicated. Currently, there are a variety of protocols that the payment methods observe and individual prevention tools.
But this doesn’t mean that breaches are impossible. They do occur, and when they do, they take a toll on the payment ecosystem. For consumers, their financial data is exposed.
Merchants on the other side lose thousands of dollars if not millions, not to mention lost consumers’ trust and a damaged reputation of their brand.
Blockchain presents an opportunity of securing the e-commerce databases in a simplified manner. The distributed ledger technology decentralizes the records and administration and in the process eliminated the single failure point.
Speed Of Transactions
The traditional payment methods do suffer sluggishness. Looking at the number of intermediaries, one can’t miss seeing the reason why. A simple stall in the payment gateway or digital storefronts or even at a touchpoint slows the entire cycle. The removal of these intermediaries and third parties slowing down the process in Blockchain technology reduces inefficiencies and delays.
But this is just but the beginning. The technology is evolving and more entities continuing to adapt Blockchain.