The finance and online transactions world has developed tremendously over the years, with new protocols introduced and employed to enhance safety and security. But it’s still far from perfect. Significant loopholes lead to millions of dollars in losses for businesses and affect their ability to sustain in an increasingly competitive market.
If one were to look at the recent figures, the number, as well as the value of online frauds, have been increasing. With credit cards as the primary medium of payment, it’s easier than ever for fraudsters to steal card details and make online payments. This, in turn, affects both the cardholder and the business involved. Businesses lose a large sum annually from chargebacks and the associated fee. Platforms have been working on ways to enhance online security, but the results, so far, have not been very promising. But it will change after the integration of blockchain technology in the payment space.
Blockchain offers several benefits, but a few that will primarily benefit payments are:
- Quick transaction time.
- Easily accessible logs and data.
- The inability to modify them.
- Reduced costs.
- Transparency.
Another significant aspect here is that the data is stored on a network of computers, unlike traditional payment services that keep it on online servers, which are easily hackable, thus putting critical information at risk of being misused. To summarize, with blockchain technology, the data is safe, costs are low, and the process is transparent.
Big firms switching to blockchain-inspired payments
Because of the concerns shared earlier, several big firms have, of late, made the switch to blockchain-based payment options. As per reports, the transition has been immensely helpful in their expansion, considerably minimized losses, and in some cases, even increased the user base owing to these benefits. And more corporations are expected to jump ship in the coming days.
Blockchain-based solutions reduce losses due to chargebacks
Chargebacks are one of the merchant’s most dreaded fears, and its graph goes alongside the one for frauds. It is imperative that these are brought under check to eliminate losses and ensure trust between parties. However, the lack of support from banks has been a significant impediment.
As per reports, banks have taken a lackadaisical approach when it comes to preventing fraudulent activities and haven’t been very supportive with the chargebacks either. But they can’t be blamed for it all! The sheer volume of chargebacks filed each day has been on the rise, and banks lack the resources to examine the data at hand and minutely observe the intricacies, which leads to it usually favoring the consumer. It led to a trust deficit and increased losses for businesses. Moreso, it sends a signal that consumers won’t be penalized for misconduct or filing false chargebacks, which may, to a certain degree, encourage the behavior.
This, too, can be eliminated with the integration of blockchain technology through a decentralized mechanism, wherein a particular set of arbitrators, after collecting the required details from the aggrieved parties, can pass a just judgment. It provides a seamless process, ensures quicker resolution, and doesn’t require a lot of resources. As per reliable sources, online retailers are expected to lose close to $130 billion to online payments between 2018 and 2023, which further highlights the importance of having a systematic plan in place to ensure secure payments and dispose of chargebacks in a way that is satisfactory to all the involved parties.
Business and user-oriented operations of blockchain payment solutions
Organizations with a central authority usually are not beneficial in situations where multiple parties are involved, and this is where decentralization comes into the picture. The latter ensures trust with and amongst all the involved parties.
Also, it’s way safer, thus ensuring that the customer’s personal and banking details are not stolen or misused. Besides, most reliable blockchain solutions offer a 24-hour customer helpline, have clear policies, and usually don’t require personal data.
Merchants looking for such blockchain payment solutions can move towards LeisurePay, one that is ticking all the right boxes, or they could also go through the other available options and choose one that best meets their requirements. But remember, blockchain is the future, and its integration with almost all central systems is inevitable. It’s only a matter of time before it achieves mass adoption, and now is the perfect time to switch to a blockchain-based decentralized payment solution for the best results.