The global payment industry, currently valued at approximately $2.83 trillion in 2024, encounters notable inefficiencies. Recognizing this, Binance Researched talked about the transformative potential of blockchain technology for this expansive sector.
If blockchain platforms can solve the pain points of traditional finance, they can acquire a lion’s share of the payment industry.
Binance Research Talks About Advantages of Blockchain
Today’s payment industry relies heavily on an analog and cumbersome infrastructure. Limited banking hours and numerous intermediaries further compound their inefficiencies.
Globally, each bank maintains its own ledger, thereby slowing down and complicating international transactions due to inconsistent standards. However, blockchain presents a novel alternative.
“Blockchains and distributed ledger technology (“DLT”) have the potential to disrupt many of the current players in the payment space, by offering a uniform, global, transparent environment in which payment transactions can be accessed with just a smartphone and an internet connection,” Binance Research wrote.
Read more: 9 Best Blockchain Protocols To Know in 2024
A key benefit of blockchain is the rapidity of transaction settlements. Traditional methods, such as Visa or Mastercard, offer nearly instant payment authorizations. Yet, the actual fund transfers between banks can face delays.
Contrastingly, blockchain transactions often settle within an hour—even for international exchanges.
For instance, a 2021 pilot between Visa and Crypto.com utilized USDC to facilitate cross-border transactions in Australia. This initiative significantly curtailed the duration and complexity associated with traditional international wire transfers.
Moreover, blockchain significantly reduces transaction costs. Remarkably, blockchain transactions on networks like Solana can cost merely $0.00025 for transferring $200, illustrating a substantial fee reduction.
Blockchain also enhances transparency and security. Every transaction is recorded on a decentralized and immutable ledger, visible to all network participants.
This openness builds trust and deters fraud. Due to its decentralized nature, no single entity controls the network, which offers a neutral, resilient payment system resistant to attacks and free from geopolitical manipulations.
Read more: Binance Review 2024: Is It the Right Crypto Exchange for You?
Despite its benefits, blockchain technology faces challenges in payments, such as scalability, on-chain complexities, and regulatory uncertainties. Nevertheless, as the payment industry is projected to grow to $4.7 trillion by 2029, blockchain solutions stand to capture a significant share of this market.
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