Mobile payments have become the preferred method of transaction for an increasing number of consumers, with 17 percent of U.S. consumers regularly using their smartphones to pay, an almost 300% increase from 2014 – India leads the way with 56% of consumers using their smartphone to pay. However, the emergence of mobile payments has also increased the number of cybersecurity and fraud risks associated with these types of transactions. Blockchain, the technology on every companies’ mind, has the ability to greatly decrease the inherent security risks involved with online purchases and mobile payments. Whether the transactions taking place are B2B, B2C or P2P, blockchain provides an additional layer of trust and security to ensure that both sides come away safe, secured, and most importantly, paid!
Blockchain technology provides the means for individuals, and entities, to transfer value (money) to untrusted parties, by trusting the technology. By utilizing the blockchain, participating parties can be confident that both ends of the agreement will be upheld and that the transfer values agreed upon are attainable.
Marc Andreessen, the renowned entrepreneur, investor and software engineer, probably said it better than anyone else has:
“The practical consequence […is…] for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer. The consequences of this breakthrough are hard to overstate.”
Nowhere is the inherent trust factor associated with blockchain more important than when dealing with peer-to-peer (P2P) payments. The Internet is rife with stories about overly trusting individuals sending money to someone who said they would provide a good or service, only to disappear when they have received payment. This is why smart contracts, digital contracts used on the blockchain, are utilized to help to protect those using the blockchain for digital transactions. Once uploaded to the blockchain, smart contracts are unchangeable, available for all to see, and must be honored by both parties. Therefore, end users must be assured that businesses handling these transactions and sensitive documents can be trusted.
Even national governments are looking to get in on the blockchain movement. Although the Narendra Modi government in India are not fans of the original use for blockchain, cryptocurrency, they are proponents of the technology and are exploring a multitude of ways to incorporate blockchain into the government. India, like most emerging markets, are heavily invested in mobile ecommerce, and as such are also heavily invested in making sure that their transactions are as secured as possible. India may even be poised to become the world leader in blockchain.
With emerging markets leading the mobile-first movement, mobile payments will continue to grow, and ecommerce will increasingly be conducted on smartphones. Emerging markets, like India, have been leading the way in blockchain acceptance, and the marriage between the two growing technologies is a match made in heaven. As the adaptation of both technologies surge at an unprecedented rate, consumers are increasingly wary of having their personal, and financial, information stolen online – blockchain could very well allay those fears with its inherent trust factor and end-to-end verification.