Blockchain is the next revolution in banking. In this article, we look at how banks are planning to use blockchain systems in their operations. Click below to know more

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2. Why Banks re looking for blockchain based
payment system
The basic idea is that Blockchain based transactions are faster, more secure and
cheaper as compared to the methods that banks use for operations. Cross-border
payments, which can take anywhere from 2-5 days to clear, and are a clear
example of this problem. Ripple has already demonstrated that it can process
transactions many orders of magnitude faster than the current system at a fraction
of the cost while ensuring a very high level of security.
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3. Another advantage of Blockchain is the transparency of its transactions.
Blockchain Technology allows all the operations and balances to be seen by all
users on the network, making it virtually impossible to be manipulated or
tampered. All of this makes blockchain based payment systems very attractive to
banks who would save a lot of their operating costs.
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4. The problem remains in the adoption, as these banks are covered from head to
toe in regulatory red tape, making them very slow moving beasts. A real-world
blockchain based payment network would require years of extensive testing
before it is released to the public because banks are responsible for maintaining
the trust for people.
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5. However, it is good to see that such payment channels are actively being
developed both by various banks and also by several other blockchain startups.
For instance, BitPesa is a company in Kenya that is working to provide a way to
send payments between people without requiring any bank. Other more
established players like Ripple are already working with numerous Japanese and
Thai banks to create efficient cash transfers through the application of Blockchain
Technology.
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6. Payments in the future
The vast majority of payments that banks handle today are done between human
being and machines or human beings and other human beings. In future,
however, as more and more devices become smarter, the bulk of the payments
are going to be M2M or Machine to Machine. For example, self-driving cars would
make payments to automated parking places, tolls, and fuel stations.
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7. Most of these transactions are going to be very small, so it would not make
financial sense to keep using the same outdated techniques to process those
payments. This is where Blockchain Technology combined with smart networks
comes into effect.
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8. Banks are centralised organisations which are susceptible to a wide variety of
hacks and security breaches. In recent years, several such breaches have led to
the identity theft of millions of people across the globe. By contrast, Blockchains
are nearly impenetrable and require access to a majority of nodes in the network
for a successful attack.
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9. That is why there is no surprise that most major banks are looking at blockchains
to make their payment processing more secure. MasterCard and Visa are already
developing their blockchain based payment networks and have filed for several
patents for the same. American Express has also added Blockchain Technology to
its payment system and has filed a patent related to Blockchain that could provide
a solution for improving the speed and functionality of its existing card networks.
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10. Meanwhile, a consortium of banks in Europe is funding Blockchain research to
develop industry standards to enhance collaboration between different blockchain
systems. With the advantages that blockchain provides, it is no surprise that banks
are rushing to employ its benefits and the future looks quite promising for
blockchain based payments.
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11. Blockchain Council Certifications
You can check out our certifications, and kick start your career in the Blockchain
space today.
● Certified Blockchain Expert
● Certified Blockchain Expertv2
● Certified Blockchain Developer
● Certified Smart Contract Developer
● Certified Solidity Developer
● Certified Ethereum Developer
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12. THANK YOU!
Any questions?
You can mail us at
hello@blockchain-council.org
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