Blockchain can today be accessed any time of the day and anywhere across the world. All the financial data recorded on the public digital ledger technology can be verified with ease, which makes it an ideal method of finance management.
While many companies in the past relied on banks and other ordinary financial institutions for financing, blockchain technology can transform how these companies execute their financing. Blockchain can improve both the visibility and productivity of financial institutions and byproducts.
Currently, various companies have already adopted the blockchain technology while others are in the process of studying it. The popularity of Bitcoin technology will transform the financial industry and enable smart financial products as seen below.
Transferring money from one country to the other is fast gaining popularity with many banks using blockchain for payments. Businesses and consumers transfer billions of dollars internationally annually, a process that has for long been expensive and inconvenient.
While Bitcoin provided an alternate method of transferring money, mainstream service providers and banks are utilizing blockchain technology to enhance payments and reduce cryptocurrency exposure.
For instance, various major banks have partnered with service providers to enable cross border remittances through blockchain technology. Currently, multiple service providers such as Trybe are in the process of developing viable solutions.
Blockchain-based money transfers have helped banks save on money and time and consumers also stand to benefit. For instance, if a worker in the US wants to transfer money to their home country, the process would be time wasting and tedious.
The worker would have to visit a money transfer office, wait to be served by an agent, and eventually, submit the money and sending charges amounting to almost 10% of the amount before completing the transfer.
The recipient would have followed a similar procedure. However, with blockchain technology, both the sender and the recipient can easily complete electronic money transfers using their mobile phones with minimal charges.
Cheaper Direct Payments
Once you send or receive payment, the funds move through credit card processing networks, banks, and other agents. Every step is complex with each service provider charging fees for each process. As a merchant, you can benefit from blockchain technology in various ways such as:
· Insufficient Funds
Payments made by checks may bounce and the fees transferred to the merchants which causes them losses. Customer electronic payments too could fail. Blockchain-based payments, however, can assure merchants of payment within minutes.
· Swipe Charges
When customers use plastic money to make payments, the merchant pays the processing fees which reduces their profits. Cheaper blockchain payment networks can be an ideal alternative for merchants.
Individuals also prefer receiving payments without fear of getting scammed. Blockchain-based payments are fast and irreversible. What’s more, they are cheaper and easier compared to bank products.
Currently, there are no clear blockchain regulations in terms of potential risks, privacy, resolution of disputes, and protection. While these problems can be solved, it’s important to conduct research and seek to understand potential challenges prior to using blockchain technology for notable transactions.