The landscape of e-commerce payments is evolving with the increase in popularity of mobile and alternative payment methods. Mobile payments revenue is expected worldwide
exceed $ 1 trillion in 2019 and beyond
Consumers 2.1B they are expected to use mobile payments within this year. Dynamic changes occurring in the payment space also raise questions about speed, convenience and security.
Blockchain has also emerged as a preferred tool for digital transformation in many industries. Its payment applications are particularly interesting. While traders are still wary of accepting Bitcoin as payment, blockchain ledger technology
(BLT) is opening the door to new payment opportunities.
The break of Blockchain in e-commerce
Traditional e-commerce is based on expensive intermediaries and slow, error-prone systems. Blockchain, on the other hand, offers a decentralized option that allows consumers to make transactions more transparent and secure.
Although alternative payments and payment security technologies invade and destroy the market, blockchain offers unique advantages that fintechs can not ignore.
The costs of processing traditional payments are expensive, typically ranging from fixed rates to a percentage of the total transaction to a combination of both. By exploiting the blockchain markets, some of the costs imposed by intermediaries could be eliminated.
The inherent transparency of Blockchain could allow an e-commerce platform that encourages good / honest behavior by rewarding consumers with a confidence rating (very similar to a credit score, but based on the number of "good" transactions completed). Those with higher
Trust scores would benefit from lower commissions, which would eventually lower abandonment rates.
By looking at the current processing transaction cost structure, sellers pay taxes along with the costs of each system in their e-commerce stack. Blockchain technology would allow sellers to aggregate various processes and systems in one location: payment
processing, inventory database, product management and other operating systems. This alone could erase significant IT costs associated with maintaining and updating each separate system.
Emerging payment methods result in additional vulnerabilities. Ensuring sensitive customer payments and data has become a complicated compliance network, individual fraud prevention tools and a variety of protocols. Being caught in that web are the consumers who are
suspicious of having their financial data exposed in a violation. The violations have an impact on the entire payment ecosystem. For merchants, damages can range from hundreds of
thousands of dollars to millions, not to mention the unexpressed cost of loss of consumer confidence and damage to a brand's reputation.
Blockchain offers the opportunity to securely manage e-commerce databases in a simplified way. Distributed accounting technology decentralizes administration and transaction records, eliminating the single point of failure in other databases.
Given the number of intermediaries present in the current e-commerce, it is easy to see how the speed suffers. Transactions are routed through digital showcases, payment gateways, issuing banks and a variety of other contact points, each of which manages data transmission
in his way. A stall in any touchpoint slows down the entire cycle.
Blockchain allows the direct management of these processes by removing intermediaries and third parties that generally slow down the process. This reduction in inefficiencies can free the process from unnecessary delays and frictions.
The full benefits of Blockchain are yet to be seen, although fintech, forward-thinking banks and traders are starting to leverage technology to improve speed, convenience and security of payments. While more entities and consumers adopt and adapt the blockchain,
the e-commerce space will continue to evolve. Blockchain has the power to shift e-commerce to faster, cheaper and safer payments.
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