Blockchain technology in payment solutions have the ability to offer significant advantages in terms of providing enhanced functional capabilities as compared to existing bulk payment systems.
Implementing blockchain technology in payment solutions involves a consensus mechanism, which consists of techniques that ensure participants processing transactions agree on which transactions are valid. Blockchain technology has the ability to drive innovation within the payment space. It provides irrevocable, real-time payments against assets having an absolute immutable state.
Benefits of implementing blockchain technology in payment solutions
Long term cost benefit
Payment solutions often experience operational inefficiencies because of transfer of information or assets keeping separate records of the event. Many times, there are two separate records, and a lot of time and resources are spent reconciling the two records at each step of the transaction. Blockchain eliminates the need of spending on data related processes. Obtaining, checking, and reconciliation can dramatically be reduced by implementation of distributed ledgers.
Fragmentation of security operations can affect transaction processes. Lack of transparency regarding security ownership and commitment can be challenging for payment solutions organizations. Blockchain technology is decentralized; thus, every participant in a transaction will know about all assets, thereby resolving ownership issues.
Speed of execution
Blockchain technology can use smart contracts in accordance with business rules. By using these contracts, transactions can be streamlined by cutting out counterparties and intermediaries.
Questions to Consider While Implementing Blockchain Technology in Payment Solutions
- How prepared is the organization for blockchain and related technologies?
- Which systems should the organization be concerned about and invest in?
- Which customers should the organization work with, and on what terms must the digital ledgers be developed?
- How well does the organization know the technology and its commercial implications?
- What is the organization’s position on retaining control of payment interfaces and customer identities?
- How robust is your blockchain strategy?
Organizations must follow the following for implementing blockchain technology successfully:Determining maturity levels in the base technology
- Developing ability to scale the solutions in a thoughtful manner
- Providing access to suitably skilled pools of human resources that have a deep understanding of the technology
Payment solution companies must focus on building and accelerating their institutional knowledge of blockchain capabilities. They must also include the technology for proofs of concept and trials of new low-risk payment products and services. These companies must give Blockchain technology sufficient time to flourish and aim for an implementation that can allow payment solution companies proper integration with the wider blockchain ecosystem.