Blockchain-based payment processors provide users with nearly instant and diverse means of using digital assets, which in turn enhances liquidity and reduces liability. Blockchain works on the core principle of decentralization enabling a digital payment network for a very low fee.
At present, a large amount of data and transaction volumes render the traditional payment processors ineffective, when mapped in terms of cost. The cost of point-to-point transactions is reduced by a large margin with the introduction of blockchain-based payment processors.
Say, for instance, you are in Massachusetts and you’d like to buy a T-shirt from a vendor in New York. Here’s how you’d buy it online – select the product, enter your card details, confirm the order, and your order is placed. While on the surface it may appear simple, but here’s what really happens:
• The card info reaches a third-party payment processing vendor
• The information is sent from the third-party payment vendor to the bank
• The bank confirms the transaction
• The payment processing vendor then updates its database marking the recipients
In the above scenario, everyone involved gets their cut at every point in the transaction. With blockchain taking over the payment system, the role of middleman is completely nullified, and all the transactions are streamlined.