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In a recent report by KPMG, an accounting firm among the top four lists worldwide, said that what is missing from the cryptoassets is institutionalization. The report went further by saying that the time has come for banks, fintechs, brokers, payment service providers, among other financial entities, to actively claim a mess of the cryptographic ecosystem.
Payment processing is one of the areas in which KPMG believes that the participation of emerging financial and support institutions is required. The relationship has pitted the current payment system, which is inefficient and full of intermediaries. This leads to a slowdown in payment processing and a significant increase in money transfer costs.
To put this into perspective, a 3% processing fee is charged on each credit card transaction. This is a progressive number as the higher the amount that transactions, the greater the processing fees. The cost of transferring money worldwide is even prohibitive.
Data at a glance
MasterCard generated $ 5.14 billion in revenue from transaction processing fees in 2017. This is an improvement on the $ 4.35 billion achieved in 2016.
At the time of writing this report, MasterCard had recorded $ 5.45 billion in revenue from transaction fees with the holiday season still to come to an end. On the flip side, Visa Inc. has not been transparent about what they do from payment processing withdrawals. But it is intended that at the end of September 2018 they had earned $ 8.92 billion.
Credit card networks claim to charge fees for network access, maintenance and support, clearing, authorization and settlement.
Only in 2018, the costs of processing universal transactions accumulated $ 7.2 billion. What is surprising is the way in which the system is insensitive to the needs of consumers and traders. Most of the tax quota is passed on to end customers and traders who are left to handle low earning margins.
Time for the decentralized payment network is now
Blockchain is making huge strides towards mainstreaming. Apart from the hype, this industry has shown a serious potential to solve the inadequacies of the centralized payment system. It promises to eliminate inefficiencies, data tracking gaps, reduce costs and increase transaction speed.
There are so many inefficiencies registered in the centralized network as high costs, many intermediaries and lack of transparency. Blockchain, through GRAFT is driving change from the front. As a centralized payment system, the GRAFT network is determined to allow the use and acceptance of Cryptocurrencies in a single point of sale.
How the new system will reduce costs
The GRAFT network aims to contain the huge number of brokers. This in turn will significantly reduce the number of small fractions of commissions paid during transactions. Because the network has pre-approved players that are tightly regulated, transaction fees are limited to acceptable rates.
The system is able to pay encryption and receive GRFT tokens from the other side. For tokens, customers will be able to receive them in the currency of their choice.
In short, the highest commission for transactions with the GRAFT system would be 1.5%. The time has come for e-commerce to make the leap and introduce convenience and efficiency for traders and customers. The GRAFT network The initiative is a timely intervention and it is hoped that it will be a good start for a quick and convenient transfer and exchange of money.
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