The blockchain as the future of commerce
The limitations of traditional payment instruments — fraud and cost — are solved by the primary strengths of blockchain technology. Accordingly, merchants and the greater blockchain community each stand to benefit from making cryptocurrency spendable everywhere.
For many merchants, payment card fraud and transaction expense are two of the most significant operating costs to manage and actively reduce (e.g., in 2017, losses due to payment card fraud amounted to an estimated 28 billion USD worldwide). Payment card fraud today takes many forms, from stolen account numbers to abuse of marketing incentives.
Even chargebacks, initially developed as a consumer protection over forty years ago, have become a vehicle for malicious activity. And smaller merchants ultimately share a disproportionate share of the damages, as they have fewer resources to counter sophisticated fraud or defend themselves in the case of a dispute.
In addition to the costs of fraud, the very act of processing a payment can be extremely expensive, due to the variety of fees and operating expenses involved in handling cash, payment cards, and other payment instruments. For instance, in 2016, the top twenty-five merchants by revenue worldwide spent a collective 19 billion USD to accept payments. In general, these expenses are a result of complex settlement processes across a variety of network participants, including payment gateways, processors, card associations, and financial institutions. Due to this complexity, a standard payment card transaction can involve as many as twelve (12) discrete steps — each one a pain point and a cost.