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Blockchain payments reduce transaction costs
Written by Davies on / Reading time: 3 minutes.
How is it possible? How do they get it?
These are two frequently asked questions when we talk about reducing transaction costs. Many people think that blockchain is an expensive technology, but they don’t know that it allows to reduce costs. Banks have many benefits to get from its implementation, although some still don’t know it.
Change the relationship between banks and their customers
The relationship between these two parties has been transformed throughout the time. Institutions have been prepared during its history to meet different challenges, but they would never have imagined the effect of the cryptocurrencies and decentralization as a business model. Just take a look at some statements that central banks have made to realize their reluctance, although we should make a few exceptions, as in Brazil or Iran, where it is believed that "there is an immediate risk to the financial system".
In any case, the relationship that has been brewing between banks and customers has been taking tentative steps. Maybe someday we would not talk about banks but cryptoactive deposits.
The question that we launch today is: why banks prefer to see virtual currency as a threat rather than as an opportunity? Are they aware of the benefits that they could obtained?
In general, society is slowly breaking down prejudices due to the possibility to access to information and ultimately to knowledge, and the discredit campaigns, as the ones have been tried to gestate, when they support statements like that it's a perfect channel for money laundering, or that it is a medium that puts at risk the financial stability.
Payments with blockchain technology
How is it possible to reduce costs with blockchain? Thanks to this technology, it is possible to make payments in a matter of seconds. The cryptocurrencies, cryptography and distributed consensus are making it possible. When transactions are made through banks, they put a series of commissions that affect, to a greater or lesser extent, to customers. With cryptocurrencies, this doesn't happen. On the other hand, it is possible to make payments without intermediaries, one to one, and with a very low infrastructure management cost.
For this reason, we believe that blockchain technology has been able to disrupt the way in which relate the banks and their customers, leaving the easement and the lack of equity between both figures.
Despite the progress that society is bringing, still today it is possible that a payment will take an entire day to be issued or received. It is no longer necessary to quickly think about banks when we talk about transactions.
A quick summary: payments with blockchain
How many movements are performed between bank accounts every day? When there are intermediaries, time slows, but thanks to cryptocurrencies and its technology it is possible to eliminate them and make everything so much easier. Moreover, some banks have already taken an step forward, as Poland's PKO Bank Polski, and other initiatives such as the Spanish’s Banco Santander and the creation of a blockchain research team.
The truth is that blockchain can do many things for banks, even more than what you can imagine. Three of them are transparency, safety and payment efficiency. Thanks to the elimination of intermediaries, costly fees that they charge are also removed for the performed services. Users are not the only beneficiaries of this love story between blockchain and payments. Banks also get important benefits by reducing their times and production costs, reactivating the monetary mobility.
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