The method in which consumers pay for goods and services will be the next battleground in financial innovation, according to a recent global payments survey from payment solutions provider ACI Worldwide. Also, Chinese e-commerce giant Alibaba is collaborating with Ant Financial to use the blockchain to launch its new “smile-to-pay” service last year in the Chinese city of Hangzhou.; The new face-scan payments service is currently only available in select Kentucky Fried Chicken establishments in eastern China. To use the service, customers place their order at a terminal that scans their face. If the photo matches the image stored in an identity database, the customer then enters their phone number, and the payment is processed. According to CNN, the system is based on Ant Financial’s digital payment platform Alipay, which has more than half a billion users worldwide and allows users to sign into its Chinese-market app using their face.
Mobile Payments and Digital Wallet Services
In January 2018 the head of Apple Pay, Jennifer Bailey attended the National Retail Federation conference in New York City (held from January 14 to 16). Bailey spoke about Apple Pay’s effect on the retail industry. With more than 34,000 people in attendance, Bailey discussed Apple Pay’s growing impact on transactions and commerce. She further outlined Apple’s goal of creating a “new shopping experience” using the iPhone that centers around “application, settlement, loyalty programs, and collaboration between stores and mobile.”
The Apple Pay head also touted the growth of the mobile payment platform, saying the service started with acceptance at just three percent of U.S. retailers but now has support at 50 percent of stores. “It’s the world’s most accepted contactless payment technology,” Bailey said.
With these developments as well as the shrinking use of cash and checks, traditional transactions are diminishing in popularity. Blockchain technology is the cornerstone of many cutting-edge transaction systems and may be the basis for even more in the future. The simplicity, transparency, and applicability of this digital record keeping technology have brought blockchain far beyond its original purpose as the underlying protocol of bitcoin. Blockchain has the potential to change the way payments are made.
Elimination of intermediaries is one-way blockchain has the potential to increase the speed of transactions. For example, when purchasing a house, it may take days for the property to be legally transferred to the buyer. With blockchain, the transaction is recorded on the ledger immediately. Also, blockchain registries have great potential for land title storage, allowing an immutable and transparent way to record property ownership. Blockchain technology can make transactions more transparent, decentralized, faster, and cheaper.
How Do Blockchain Payments Work?
With blockchain transactions, a chain of users transacts with one another. Each transaction is recorded, and this is called a block. What makes blockchain payments unique is that the entire ledger is on the servers of many users who validate the transactions. Blockchain technology still has a long way to go regarding adoption beyond its roles in digital currency and certain supply chain management practices. Blockchain technology has the potential to change how consumers and businesses alike record and verify transactions.