Cryptocurrency has revolutionized global payment services, especially considering blockchain, which has completely altered ways of sending and receiving money. With the growth of DLT, many businesses have realized that blockchain is not only for cryptocurrency. Instead, it is beneficial to companies also. Blockchain is an efficient technology that can save costs and provide better customer service in the global financial market. Prominent financial institutes invest a large sum of money in resources to find the benefits of cryptocurrency in international payment services.
Cryptocurrency and blockchains in Global payment services
Cryptocurrency and Blockchain technology is an evolving technology based on numerous facets that makes it capable of growth shortly. Billions of dollars transmission take place every year between consumers and businesses. It takes place through conventional fund transfer procedures that are expensive and time-consuming. However, some financial institutes have adopted blockchain as an alternate platform for payment services. According to a PwC report on Global Fintech, it is estimated that 77% of institutions will experiment or use blockchain in their systems by 2020. Cryptocurrencies are capable of making international payments faster and cheaper. The transaction can be carried out securely within a day or two through verification done on blockchains.
The technology is capable of revolutionizing the global payment services due to the following features:
- In global payments, if the technology is adopted and parties are part of the system, the sharing of payment information will be quicker. This way, the delay caused due to payment processing and settlement time can be avoided. Moreover, there are no transmission costs on the network associated with transactions.
- The distributed ledger technology creates a history of transactions stored on various computers to allow a shared view over the network. It prevents complex reconciliation processes as in traditional banking, which ensures transaction consistency in payment processing.
- The technology uses cryptography making it a secure platform for payment services. Moreover, it eliminates the need for third-party which causes a delay in the process and increases costs.
- In cryptocurrency, there are popular blockchain platforms like Ethereum, Corda, Hperledger, etc., which have valid data privacy policies considering the requirements of financial institutions. The shared ledger ensures that transactions are only visible to the concerned parties.
- The smart contracts in cryptocurrency and blockchain technology perform the validation outside the payment system. Smart contracts are a set of rules required by the business process to ensure that all the conditions have been met to complete the transaction.
- The consensus protocol is a trusted part of the technology to avoid forgery and double spending of funds. It is essential for maintaining the consistency and integrity of transactions.
Cryptocurrency and blockchain technology is disrupting the traditional procedures of payment services. It has revolutionized the process of sending and receiving money. With the aid of cryptocurrency, blockchain can be used to facilitate money transfer and transactions. Facets like programmable capabilities, greater customization, authenticity, and traceability make the technology appealing to financial institutions. This technology can potentially grow in the supply chain, investment banking, trade finance, and global payment services.