The Advantages of Blockchain-based Payments

Banking CIO Outlook | Tuesday, March 19, 2019

The businesses are using blockchain technology to revolutionize the world of payments and facilitate faster payment processing, ensure higher levels of security, garner detailed audit information and deliver better customer experience.

The blockchain technology streamlines the process and stores every transaction in a securely distributed ledger. Once the transaction is complete and entered, it cannot be reversed or changed in the ledger fostering great accountability and security.

The benefits of implementing blockchain payments are numerous. The blockchain-based payments are cost-effective, secure, almost immediate and transparent.

Better B2B (Business-to-Business) Payments

Blockchain can solve the challenges of cross-border payments by improving and offering added security, lower conversion fees, and higher transfer speed. These payments can further be supported with smart contracts adding more certainty for both sender and receiver.

Instant Spot Trading 24/7

The blockchain database introduces direct trading between clients that do not need any third party intervention for settling a transaction. Trade contracts can be now settled immediately reducing settlement costs. It also provides a highly liquid market at all times.

The idea for spot trading is for immediate delivery of the traded instrument, and with the application of blockchain technology, one can spot trade even on weekends.

Cheaper Banking

The banks are always optimistic about the cost reduction benefits of blockchain technology. It helps in reaching an agreement on the validity of a transaction. The verification of the payment is done by every computer on the network in less than few minutes recognizing it as a valid transaction.

Improves Traceability

The blockchain records even the exchange of goods which ends up in an audit trail showing where the asset has come from and about every stop it made on its journey. It helps in preventing fraud and identifying the details and origin of a product(s).

Enhanced Security Measures

The blockchain makes payments more secure than other record-keeping systems and machines. Every transaction done with blockchain is approved, encrypted and linked to the previous transaction. 

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