Today everyone is talking about
blockchain technology and a number of organisations are racing to
harness the power of its many applications. Let us understand what
this means.
A blockchain is a distributed ledger of
transactions that are recorded chronologically. Blocks that make up a
blockchain contain data related to the most recent transaction and a
hashed reference to the previous block.
This hashed reference creates a link
between all the blocks in the chain, and as no one technically ‘owns’
a blockchain, it makes it impossible for any single participant to
corrupt it. This data is stored across the blockchain network which
gives it its inherent security.
Blockchains can benefit international
payments majorly due to the positive impact on speed, cost and
security.
A payment
gateway based
on blockchain would enable payments to be sent anywhere in a period
of 15 to 20 seconds. This is notably faster than routing payments
through traditional banking routes which could take up to 3 days.
Using
blockchain ecosystems as a base, payments are made more secure and
less prone to attack compared to a traditional online
payment gateway.
Security
is a fundamental element that will drive mainstream acceptance of
blockchain into the online payment industry.
Incorporating
blockchain into a traditional payment
gateway is
not only beneficial to merchants with respect to decentralization but
also for consumers as their confidence in online platforms will be
imbued by this core security association with blockchains.
As
of now, this ability to make business payments is an option
restricted only to a few technology firms. Currently it is the
financial service sector that has tapped into the potential of
blockchain to change the way it functions.
Ultimately,
businesses that want to streamline processes and make payments easy,
secure and quicker should look to adopt blockchain technology.
Payment
gateways in India
are
also looking into blockchain technology to further enhance
the services they offer to their merchants.
The
future of online payments demands adoption of blockchain in all
businesses by seeking out payment service providers that will be able
to help with access to blockchain.
This
would be true for high-impact sectors such as multicurrency payments
or international settlements where fewer traditional online payment
gateways are present.
