The race is on for using blockchain-based solutions for accelerating payments. In a world of finance where speed is the main competitive factor determining the appeal and loyalty of millions of users, every little edge comes in handy for increasing capitalization and prominence in the global arena.
Visa and MasterCard are vying for supremacy with the likes of PayPal, constantly looking for advantages and new technologies to bolster their performance.
The advent of blockchain heralded the start of a new race and all of the main market players rushed off to start developing and integrating solutions based on the new technology. And while the transactional volumes of the giants are growing, so is interest towards blockchain as a viable add-on to existing infrastructures, whose successful merger may well prove to be the decisive factor in winning the processing acceleration race.
The latest statistics
The general statistics show that the volume of transactions carried out by all of the main payment providers is growing.
A recent review by Statista shows that the number of purchase transactions worldwide in 2019 topped the 400 billion mark. The distribution by brand demonstrates a clear advantage for Visa, which has surpassed the 185 billion mark. It is followed by MasterCard at 131 billion. American Express closes the trio with 8.8 billion transactions in 2019.
The statistics also showed a clear preference among those polled in using online transactions for making payments. The numbers indicate that 44% of respondents prefer credit card payments, 32% prefer debit cards, and 14% opt for PayPal.
Given that transaction volumes are growing year-on-year, it is clear that the popularity of online payments will increase along with it. The recent news coming from the main financial gateway providers is indicating that the adoption of blockchain-based transaction acceleration solutions is being leveraged as a powerful instrument for winning the race.
The lay of the land
PayPal is being seen as the main serious contender for the title of the most versatile payment instrument of the future. The statistics of the gateway show that its volume of transactions has been steadily growing. Q2 of 2020 has seen an increase in transactions to as much as 225 billion, up from 190 in Q1.
The impact of the coronavirus on the volume of transactions cannot be downplayed, as the pandemic has resulted in an explosive growth of online payments. It has also led to a corresponding increase in demand for digital payment facilitating services. The results were instant as almost 50% of all global shopping was redirected online and became considerably easier than offline shopping, encouraging shoppers to buy more from the convenience of their homes.
Such an increase in payments also led to heightened demand for cryptocurrencies. Statistics from Coinmap.org indicated that the number of venues accepting cryptocurrencies has grown by 6.8% since the beginning of 2020. At the same time, MasterCard has seen its revenues drop to $3.34 billion, down 19% from last year. Visa was just as affected, its revenues dropping by 4% as a result of the pandemic.
Such negative dynamics have not left the mainstays indifferent as both are engaged in integrating cryptocurrency payment solutions and blockchain-based technologies into their traditional infrastructures. MasterCard is ahead of the race, promoting its Accelerate card program among exchanges and payment services.
But Visa is not intent on being left behind the curve either and is even engaged in shaping cryptocurrency regulation by participating in the World Economic Forum, pushing recommendations to central banks to ensure the adoption of more crypto-friendly laws, and introducing proprietary instruments.
Adoption underway
Meanwhile, emerging companies are offering their own solutions for helping shoppers make use of crypto facilities. The Paxful P2P Bitcoin exchange platform is gaining momentum in the adoption race by offering Google Pay transactions for buying Bitcoin. Such a move made it possible for customers around the world to make use of debit and credit cards for buying cryptocurrencies and making purchases through Google Pay and Visa.
Other companies making headway include Cyclebit – a cryptocurrency payment processing service that offers its business clients solutions for accepting cryptocurrencies at record low commissions. The company has already established its presence on the market as one of the largest providers of POS solutions for accepting cryptocurrencies for retailers. Over 50,000 Cyclebit mPOS terminals are currently in use by more than 10,000 businesses.
Cyclebit’s flagship product – Cycle Online is precisely called upon to facilitate the transition of retailers into the new online payments environment. The innovative solution is tailored for e-commerce clients and allows them to accept cryptocurrency payments globally and receive funds in local currencies. The software gives users the opportunity to pay using BTC, BCH, LTC, ETH and other cryptocurrencies with no volatility risk.
The tap2go application from CycleBit further enhances the UX in the e-commerce sector by turning any Android smartphone with an NFC module into a terminal for receiving contactless payments through Google Pay, Apple Pay and Samsung Pay. Considering that contactless payments from mobile devices account for more than 80% of all non-cash payments in Russia alone, the prospects for the adoption of such solutions seem broad.
Considering that contactless payments are becoming an integral part of the modern world in 2020, Cyclebit quickly adapted to the changing market conditions under the influence of the pandemic, becoming one of the first companies to offer retailers multiple online payment solutions.
“2019 was certainly a transformative year for cryptocurrencies and 2020 is certain to make the market grow even further. Cryptocurrencies are expected to become stronger as they operate globally at a time when most nations have closed their borders and are facing the dire consequences of the impact left behind by the Covid-19 crisis,” as stated by Daniel Bessmert, CEO of Cyclebit Group.
Among the other market players eyeing the emerging payments revolution is CoinPayments, a cryptocurrency payments processor, which has recently announced a strategic partnership with Shopify. Their cooperation is set to allow vendors to accept payments in over 1800 cryptocurrencies supported by CoinPayments. Adoption is already becoming a worldwide phenomenon as Slovenia has surpassed the 1,000 mark of locations accepting cryptocurrencies as means of payment.
Next-gen payment solutions focusing on UX
The need for a greater focus on the user experience is of top priority for payment provider services to ensure a smoother transition and adoption process for a blockchain-based infrastructure.
Making cryptocurrencies more accessible and understandable for average users is now the main task beckoning before the main market players, pushing technical issues to the background.