Various P2P money transfer apps assure to provide the same basic service: a quick, free and easy way to transfer money to another person. But, all of these apps are available with significant limitations or restrictions. For example, a lot of P2P payment apps allow transfers merely within a specific geographic region. Also, as they require personal information from users, they all are easy target for hackers. Block-chain based system is the key to remove all these loop holes by providing seamless, worldwide easy and secure payment functionality.
Venmo is specifically famous with millennials, as it joins social media with a user-friendly, free money transferring platform. Users who create accounts using their Facebook accounts are able to send messages to other Venmo users, and can see how their friends are spending money. While innovative, this platform is also having some limiations and security issues. Like, money transfer is only available to to registered users in United States. Plus, Its security have always been an issue from its inception and recent hacks are also not supporting the image. User are fast to talk about the things Venmo offers, but they still don’t know the consequences of using a third party applications for transfer and using money.
For example, a user was not notified when his account got hacked, but notified with a notification of large transaction from his account.
Chase had pinged Grey not about a credit to his account, but a debit for $2,850, through Venmo. Confused, Grey tried to pull up his Venmo account, but his password no longer worked. He used the reset option to get in, then inspected his settings. Under email authentications, a new address appeared. Notifications were disabled. Grey’s payment history showed that the funds—slightly below Venmo’s weekly sending limit of $2,999.99—had been sent at 3:09 p.m. the day before to a user he didn’t recognize. Some text listed the transaction’s ominous-sounding purchase: “for about time.” Clearly, something was wrong—yet Venmo hadn’t notified Grey that anything suspicious could be going on. “I never got an email that my password had changed, that another email was added to my account, that another device was added to my account, or that a lot of my settings had changed,” he says. A colleague and I were able to duplicate this lack of notification with a quick test: Venmo doesn’t alert you if your password or email credentials change from within the account.
TransferWise is a socio-finance app that allows user to make some cross-border transactions, but it can’t handle payments when both parties are in the U.S. TransferWise allows transactions where a U.S. user is sending money to a recipient in a country where TransferWise operates. So,if an individual wants to engage in transactions both domestically and internationally, he needs to use two completely different apps and even then there won’t be worldwide coverage.
WeChat is another socio-finance app that permits communication between its users. It is used to provide cab-hailing, food-ordering, and appointment-booking. It is most famous in China, which allows users to transfer money to their bank accounts with a WeChat Wallet, but charges a transaction fee of 0.1% for transfers above 1,000 yuan (approximately $153). WeChat is having currently 650 million users and is China’s most popular mobile messaging app.
Blockchain technology can rectify the weakness of web-based social-finance apps in no time, because the applications distributed by blockchain (“Dapps”) provide immutability, security, privacy, and efficiency. Not only this, the blockchain come with an additional advantage of having no geographical limitations. The blockchain-based application, Circle, is a payment application with a simple proposition: “[S]end money anywhere, in any currency, without the friction (transfer delays and fees) of traditional clearance options.”
Most importantly, Circle transactions are not limited to virtual currency:
Circle still runs on the bitcoin blockchain as its rail, but now Circle users can deposit money to Circle from a Visa or MasterCard credit or debit card, and never have to deal with bitcoin at all. (Circle’s website doesn’t even mention the digital currency.) “No one ever sees bitcoin, it’s just underneath,” says co-founder Jeremy Allaire. “If you want to, you can. But we think the number of people who want a non-state-sponsored digital currency as their primary currency is really small.” Circle uses the bitcoin blockchain because it is permissionless, open and global—and that will be its key weapon in the battle over payment apps, which has heated up quickly.
Since it is built on a public blockchain platform, the money transfer procedure via Circle is super easy. It is as effortless as the processes involving people in different countries to communicate via email. The ability to provide an instant worldwide payment system places Circle far ahead of web-based social-finance applications.
Bitwala, another blockchain-based Daap, has been recently launched by Bitwala Messenger. It allows its users to interact and send money to each other using all major Altcoins because of its partnership with ShapeShift.
Blockchain-based payment Dapps grant their consumers their privacy and want to have control over their personal information. By allowing payments using virtual currency, users are able to transact globally without having to create/maintain bank or credit card accounts. This eliminates requirement of sharing private financial information such as bank account information or credit card/social security numbers to third-parties.
While web-based social-finance apps are gaining hype, they generally have countable disadvantages because they are limited by the functionality of the internet. Blockchain technology has rectified every limitation, making it the forefront of transforming the way in which value is transferred between individuals throughout the world.
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