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.
Block chains can benefit international payments majorly due to the positive impact on speed, cost and security.
A payment gateway based on block-chain 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 block-chain 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 block chain into the online payment industry.
Incorporating block-chain into a traditional payment gateway is not only beneficial to merchants with respect to decentralisation but also for consumers as their confidence in online platforms will be imbued by this core security association with block-chains.
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 block-chain to change the way it functions.
Ultimately, businesses that want to streamline processes and make payments easy, secure and quicker should look to adopt block-chain technology.
Payment gateways in India are also looking into block-chain technology to further enhance the services they offer to their merchants.
The future of online payments demands adoption of block-chain in all businesses by seeking out payment service providers that will be able to help with access to block-chain.
This would be true for high-impact sectors such as multi currency payments or international settlements where fewer traditional online payment gateways are present.