The first thing that comes to many individuals’ minds when they hear about blockchain technology is cryptocurrency, but it represents more than just cryptocurrency. In this digital era, blockchain payment processing is replacing traditional payment methods because of its vast advantages over conventional payment methods.
A recent study by Blockchain.com reveals that by the end of October 2023, over 910M blockchain transactions have been recorded. These statistics provide evidence of the global shift from traditional payment methods to digitalization.
This blog will share the advantages of moving towards blockchain payment processing. We will discuss in detail numerous benefits that blockchain technology has and traditional payment methods lack.
By the end of this blog post, you will find the difference between these two methods and find the reason why the world is shifting towards blockchain payments.
Advantages of Blockchain Payment Processing:
Blockchain payment processing offers numerous advantages, with some of the most important ones outlined below:
Security Preventive
The main advantage of using the blockchain payment method is the strength of security over the traditional payment methods. Blockchain transactions are encrypted so no third person can interfere in the transaction process. In contrast, in conventional transaction methods, the transaction involves the intermediate firm, the weak link in the security chain.
The transactions through blockchain are stored on different nodes connected to the network, which makes it impossible for hackers to alter the transaction data. Also, this decentralized way of processing payment prevents hackers from breaching security.
That is why making payments through blockchain is much more secure, tamper-proof, and trusted than anyone else.
Blockchain Transaction Streamlining and Cost-Efficiency
Streamline transactions refer to the fact that transactions are made peer-to-peer by blockchain technology without any intermediary. This non-involvement of the intermediary makes the transaction faster as many intermediaries’ involvement takes time to process.
Also, the involvement of intermediaries costs you much for transactions in the form of transaction fees. So, blockchain makes the transaction faster and more cost-effective than traditional payment processes, benefiting both businesses and consumers.
Transparency and Traceability
Blockchain technology records the transaction on the ledger, which is public and visible to all the nodes connected in the blockchain network. So, It is difficult to challenge the transparency of the blockchain transaction, while traditional transaction methods cannot track the payments in real-time.
That’s why transactions through blockchain can easily be traced back to their source. This gives the buyer and seller confidence and makes it a trustworthy process. The blockchain transaction’s transparency and traceability help individuals make payments beyond the borders and expand their area of connection.
Automation and the smart-contracts
The blockchain platform starts the automation process of payments and transactions based on some agreements and contracts. If the contract conditions are met, the transaction is made automatically.
This feature does not require any third person to be involved in the contract, which saves the cost of the contract. That is why we call it a smart contract between two individuals.
The automation and accessibility of smart contracts present an area for enhancement in traditional payment processes. Smart contracts give a little boost to the people’s interest in making contracts and enhancing their business.
24/7 Accessibility
The blockchain payment process enables an individual to make a transaction whenever he wants to, 24 hours and 7 days a week. The traditional transactions take a lot of time and are restricted to specific banking hours and working days.
You have to wait for the transaction to be processed during the office hours of the traditional transaction firm. Delay is unavoidable if an off day hits your transaction time and may destroy your business deal.
In blockchain technology, you can start a transaction at any time and complete a transaction at any time, so you don’t have to carry the burden of “waiting for payment” on your head while dealing in your business.
Conclusion
In today’s world, payment through traditional ways is much more time-consuming and considered an extra mental worry about security and transparency. It needs to improve in many aspects compared to blockchain payment processing.
The blockchain technology is very much secure because of end-to-end encryption. It is reliable and trusted because of the transparency and traceability ascertained by the record-keeping on the public ledge.
It’s also a cost-effective and speedy process as it does not involve any intermediate individual or system. The stats show that the number of transactions through blockchain payment processing is jumping high with time, and many CIOs will integrate blockchain technology in their ongoings.
As time passes, the trend of blockchain technology will be more sophisticated and evolve worldwide.
Author:
Stacy Dubovik: Financial Technology and Blockchain Researcher
Stacy joined ScienceSoft in 2020, bringing in her expertise in large-scale digital transformation projects and practical knowledge of the finance domain. Stacy frames ScienceSoft’s service offerings and technology guides in corporate finance, BFSI, DeFi, and blockchain. She works side by side with business analysts, software architects, and developers to help create innovative solutions that bring unique client value. Stacy continuously monitors customer expectations and technology trends in the BFSI market and explores the newly-emerging fintech and blockchain products.
