Blockchain shines a spotlight on the digital payments trend

By Puja Sharma

Within the FinTech world, blockchain has become a leading subject for its ability to inexpensively facilitate extremely fast and highly secure digital transactions.

The Covid-19 pandemic rattled every market imaginable worldwide, with some changes becoming permanent as they simply accelerated existing trends. The digital payments market certainly benefited as online transactions skyrocketed with some brick-and-mortar stores even refusing to take cash because of the threat of spreading germs. But don’t confuse a truly cashless society — where cash and coins physically do not exist — with one where money is still around, just not used frequently.

The world was already moving towards the latter, and the coronavirus sped up the process, which shines a spotlight on the opportunities in digital payments. Companies big and small are making the most of technology that serves as the backbone of the next generation of payment systems, such as GreenBox POS, a provider of customized blockchain payment solutions that is leveraging acquisitions to grow its international footprint. Others enjoy rapid growth in the exploding market of financial technology, or FinTech, including significant developments from the likes of ACI Worldwide Inc., NCR Corporation, Paysafe Limited, and Intuit Inc. to shepherd the industry along.

ACI Worldwide Inc. is a global software company that provides mission-critical, real-time payment solutions to corporations. NCR Corporation, once synonymous with a cash register, is now a global enterprise technology provider. Paysafe Limited was founded in 2007 as an eCommerce payments platform with the mission to enable millions of consumers to use alternative payment methods to make online purchases. Intuit Inc., a global technology platform and owner of the TurboTax, QuickBooks, Mailchimp, Mint, and Credit Karma serves more than 100 million customers worldwide.

Whether one is a proponent or opponent of the notion of a cashless society, there is no denying the fact that people are not pulling dollar bills out of their pockets to pay for goods and services like they used to. Pew Research in 2018 showed that 29% of Americans go an entire week without making a single cash purchase.

Data from Square showed that cash purchases transacted by its sellers decreased from 37% of sales in February 2020 to 33% in April 2020, a signal that the pandemic was having a meaningful impact. In its Resilience, Replacement, and Renewal report, global consultancy A.T. Kearney identified going cashless as a top global trend while noting Riksbank data showing cash payments were used in just 15% of retail transactions in Sweden in 2016, down from 40% in 2010.

Within the FinTech world, blockchain has become a leading subject for its ability to inexpensively facilitate extremely fast and highly secure digital transactions. The digital record-keeping technology that underscores Bitcoin, blockchain is becoming ubiquitous in countless industries and recognized as a bona fide threat to conventional banks because its structure doesn’t require a middleman to complete transactions.

There is plenty at stake according to Mordor Intelligence, which puts a transaction value of the global digital payments market at $5.44t in 2020 with expectations for 11.21% compound annual growth to reach $11.29t by 2026. And that’s not all. An estimated 21% of the world (~1.7 billion people) are unbanked. Blockchain could provide an affordable solution that is superior to today’s modality used to transfer about $500b across borders annually through personal remittances.