8 ways that the blockchain will change mobile payments
Mobile payments and the growing blockchain technology are the two most interesting, and booming, developments in the payments industry. Did you ever wonder what will happen when these two trends will amalgamate so as to develop a more secure, speedy, and effective way to pay for goods and transfer funds?
Here are eight ways that the blockchain is going to revolutionize mobile payments.
- Increment in Security
The biggest obstacle that mobile payments have to overcome is security concern. The blockchain has the ability to transform this because this technology focuses on being hyper-secure, and also preventing scams like fraud, double-spending, and price gouging. This is to ensure that transactions are accounted for on a tamper-proof ledger and it’s extremely difficult to crack through user’s accounts.
- Instant Payments
We expect mobile payments to be quick. However, transaction time may vary from several minutes to hours. This is an issue with bitcoin as well.
Implementing blockchain technology can help payments become extremely instant because developers are tirelessly working to creating faster networks where one could send money to friends residing in any part of the world. In a speck of time, the friend can access these funds on their smartphone.
- P2P Lending
Peer-to-peer lending is one of the hottest trending topicsof payments industry. P2P lending is the fastest growing fintech industry, with its growth attributed to the convenience, low interest rates for borrowers, and a solid ROI for investors. Practicing blockchain can help borrowers use their mobile devices to secure a loan directly from a lender without hassling through regulations and paperwork of traditional banks or financial institutions.
Additionally, blockchain technology could be used through apps and social media accounts like Facebook or Twitter in orderto make lending money to friends secure and convenient.
According to the World Bank, the average cost of remittance across the globe is 7.5% (approx.), with commercial banks typically at over 10%. If this could be decreased to even 5%, customers across the globe could experience annual savings of $16 billion. *awestruck*
Blockchain emits the use of third parties and allows mobile users to transact money to anyone in the world without having to pay for expensive service and transaction fees. A number of companies, like Abra and Coins.ph are already achieving this.
- Mobile Wallets
Gone are the days of cash and cheques. With Apple Pay, Samsung Pay, Android Pay, and retailers like Wal-Mart offering digital wallets, the convenience is attractive to mobile users.
The biggest hurdle to cross, however, is security. Blockchain technology will provide strict security for mobile wallets by providing features like multi signature to verify a purchase. The tech can also improve the speed, usage, and reduction of fees for worldwide payments when using a mobile wallet.
- Reward and Loyalty Programs
Customers love being rewarded with extra benefits just by shopping at a business. Mobile has already proven to be an excellent platform for offering and managing reward programs – just ask Starbucks. The blockchain has the ability to take this to an unimaginable level by simply enhancing the way for trading these points. For example, you could send some of your points from Starbucks or your airline to your spouse with just a tap of a button.
Plutus, an interesting app, is already rewarding users with digital tokens just for transferring funds or paying for items. These cashbacks can be used anywhere that accepts bitcoins. In the future, this reward system could be used by merchants to reward customers without limiting them to just one store. For example, you could use your airline reward points at Starbucks.
- The Unbanked Getting Banked
Access to a bank account remains a major concern for millions of people across oceans. Blockchain allows people armed with a smartphoneto participate in global eCommerce, securing loans, or transferring money to friends or family securely and without pricey fees, even if they do not have a bank account.
- Expansion of Wearables and IOT
Mobile payments are going to go beyond smartphones and tablets. Wearables like watches, bracelets, and rings are also emerging in the marketplace. And, there’s also the impending explosion of the Internet of Things. With the blockchain, users can store their payment information without having to worry about fraud.
It will be interesting to know how easy this is going to make payments in the future. One distant example in the future, via Forbes, is walking into a store to purchase milk. “With a wave of your hand, your smartwatch detects the translucent cryptography on the milk carton and performs a hash function. The milk is now instantly, irrefutably yours.”
As for IOT, the blockchain is giving developers the chance to tinker with APIs in order to simplify the connection of all of your devices. Just imagine. Your fridge may notice that you’re out of milk and order and pay for it automatically. Practically magical!
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Hitesh Malviya is the Founder of ItsBlockchain. He is one of the most early adopters of blockchain & cryptocurrency enthusiast in India. After being into space for a few years, he started IBC in 2016 to help other early adopters learn about the technology.
Before IBC, Hitesh has founded 4 companies in the cyber security & IT space.