{"id":17033,"date":"2022-05-02T18:32:54","date_gmt":"2022-05-02T13:02:54","guid":{"rendered":"https:\/\/cigniti.com\/blog\/?p=17033"},"modified":"2024-05-14T15:57:01","modified_gmt":"2024-05-14T10:27:01","slug":"blockchain-pain-points-payments","status":"publish","type":"post","link":"https:\/\/www.cigniti.com\/blog\/blockchain-pain-points-payments\/","title":{"rendered":"How Blockchain is Solving the Pain Points in the Payments Sector\u202f"},"content":{"rendered":"<p><span data-contrast=\"auto\">Digital security has always been an issue for payment organizations and their customers. Transparent and immediate payment is the basic need. Payments need to be made easy, fast, and highly secure to enhance and popularize digital payments and be more customer-focused.\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335557856&quot;:16777215,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><a href=\"https:\/\/www.cigniti.com\/services\/blockchain-engineering\/\"><span data-contrast=\"none\">Blockchain technology<\/span><\/a><span data-contrast=\"auto\"> has developed a solution that addresses payment security needs and transaction transparency and boosts the overall efficiency of financial transactions. The technology works on a no-intermediaries method that excludes the need for a primary regulator.\u202f\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335557856&quot;:16777215,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">To understand this better, let us deep dive into a payment use case, its pain points, and how the <\/span><span data-contrast=\"auto\">blockchain payment system<\/span><span data-contrast=\"auto\"> solves them.\u202f\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335557856&quot;:16777215,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335557856&quot;:16777215,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p aria-level=\"2\"><b><span data-contrast=\"none\">Use Case \u2013 Peer-to-Peer border transaction\u202f<\/span><\/b><b><span data-contrast=\"none\">\u202f<\/span><\/b><span data-ccp-props=\"{&quot;134233117&quot;:true,&quot;134233118&quot;:true,&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Below is the conventional flow where there is the Payer, Payer Bank, local payment infrastructure, local correspondent of payer bank, clearing infrastructure, overseas correspondent of receiver bank, receiver side payment infrastructure, payee bank:<\/span><\/p>\n<p><span data-contrast=\"auto\"><img decoding=\"async\" class=\"size-medium wp-image-17036 aligncenter\" src=\"https:\/\/www.cigniti.com\/blog\/wp-content\/uploads\/Use-Case-\u2013-Peer-to-Peer-Cross-border-transaction-555x282.jpg\" alt=\"\" width=\"555\" height=\"282\" srcset=\"https:\/\/www.cigniti.com\/blog\/wp-content\/uploads\/Use-Case-\u2013-Peer-to-Peer-Cross-border-transaction-555x282.jpg 555w, https:\/\/www.cigniti.com\/blog\/wp-content\/uploads\/Use-Case-\u2013-Peer-to-Peer-Cross-border-transaction-768x391.jpg 768w, https:\/\/www.cigniti.com\/blog\/wp-content\/uploads\/Use-Case-\u2013-Peer-to-Peer-Cross-border-transaction-600x305.jpg 600w, https:\/\/www.cigniti.com\/blog\/wp-content\/uploads\/Use-Case-\u2013-Peer-to-Peer-Cross-border-transaction.jpg 778w\" sizes=\"(max-width: 555px) 100vw, 555px\" \/><\/span><\/p>\n<p><span data-contrast=\"auto\">As you can see from the above, cross-border payments are inherently more complex than domestic payments.<\/span><\/p>\n<p aria-level=\"2\"><b><span data-contrast=\"none\">The Main Challenges in these Cross-Border Payments<\/span><\/b><b><span data-contrast=\"none\">\u202f<\/span><\/b><span data-ccp-props=\"{&quot;134233117&quot;:true,&quot;134233118&quot;:true,&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"none\">Transaction Speed<\/span><span data-contrast=\"none\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559685&quot;:360,&quot;335559731&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">It takes three to five business days to complete a cross-border transaction.\u202fA significant time zone difference between the two involved currency jurisdictions plays a vital role.\u202f\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335557856&quot;:16777215,&quot;335559685&quot;:720,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">To settle each currency leg, the funds need to be transferred through the relevant domestic payment systems, and the operating hours of these domestic payment systems may vary across international time zones, hence delaying the settlement of the transactions.\u202f<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"none\">Transaction Cost<\/span><span data-contrast=\"none\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559685&quot;:360,&quot;335559731&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">Sending an international payment through the existing banking channels is a complex, multi-step process that involves several intermediaries. Cross-border payments become expensive because banks often do not have direct relationships with one another globally. They, in turn, have intermediary banks to make indirect fund transfers.\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335557856&quot;:16777215,&quot;335559685&quot;:720,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">The intermediary bank charges a fee for this service, which is deducted from the total transfer amount. The remitter and the beneficiary incur this cost, or either party must pay the complete amount. This fee is on top of the fees charged by the remitter or recipient bank.\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335557856&quot;:16777215,&quot;335559685&quot;:720,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">The charge is usually 2% to 3% for high-volume cross-border payments. However, it can go up to 10% if payment volumes and values are low.\u202f\u202f<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"3\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"none\">Transaction Security<\/span><span data-contrast=\"none\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559685&quot;:360,&quot;335559731&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">Different jurisdictions have different regulatory requirements, which introduce risk to a transaction. Additionally, when records are kept by each central authority participating in the transaction, like a bank, they are vulnerable to interference.\u202f\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335557856&quot;:16777215,&quot;335559685&quot;:720,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Users could compromise their data if that authority is hacked, damaged, or taken offline.\u202f<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"4\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"none\">Transaction Opacity<\/span><span data-contrast=\"none\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559685&quot;:360,&quot;335559731&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">Since there are multiple participants in a single transaction, tracking the payment while it is in transit is complex. There is uncertainty about the final payment amount and scheduled delivery. It is also difficult to quickly track transactions with problems.\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335557856&quot;:16777215,&quot;335559685&quot;:720,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">This is due to the lack of an end-to-end system or rule set and the need to transact in different currencies across different time zones and comply with regulatory requirements.\u202f<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"5\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"3\" data-aria-level=\"1\"><span data-contrast=\"none\">Correspondent banking<\/span><span data-contrast=\"none\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559685&quot;:360,&quot;335559731&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">The number of correspondent banking relationships is declining, particularly where transaction volumes do not justify the bank&#8217;s compliance costs and in jurisdictions where transactions may be high risk or where compliance is difficult to meet.\u202f<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"6\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"4\" data-aria-level=\"1\"><span data-contrast=\"none\">Liquidity<\/span><span data-contrast=\"none\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559685&quot;:360,&quot;335559731&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">Businesses or financial institutions could also face liquidity challenges, with amounts sitting in nostro or vostro transactional accounts around the world, tying up the capital that could be used in more beneficial ways.\u202f<\/span><\/p>\n<p><span data-contrast=\"auto\">\u202fNow, with <\/span><span data-contrast=\"auto\">blockchain for payments<\/span><span data-contrast=\"auto\">, the above challenges are resolved.\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335557856&quot;:16777215,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p aria-level=\"2\"><b><span data-contrast=\"none\">Cross-Border Implementation with Blockchain<\/span><\/b><b><span data-contrast=\"none\">\u202f<\/span><\/b><span data-ccp-props=\"{&quot;134233117&quot;:true,&quot;134233118&quot;:true,&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">If you see the depiction below for cross-border implementation with blockchain, we only have the payer, payer bank,<\/span><span data-contrast=\"auto\"> blockchain payment processing i<\/span><span data-contrast=\"auto\">nfrastructure, and payee bank.<\/span><\/p>\n<p><span data-contrast=\"auto\">\u00a0<\/span><\/p>\n<p><b><span data-contrast=\"auto\"><img decoding=\"async\" class=\"size-medium wp-image-17035 aligncenter\" src=\"https:\/\/www.cigniti.com\/blog\/wp-content\/uploads\/blockchain-infrastructure-555x267.jpg\" alt=\"blockchain infrastructure\" width=\"555\" height=\"267\" srcset=\"https:\/\/www.cigniti.com\/blog\/wp-content\/uploads\/blockchain-infrastructure-555x267.jpg 555w, https:\/\/www.cigniti.com\/blog\/wp-content\/uploads\/blockchain-infrastructure-768x370.jpg 768w, https:\/\/www.cigniti.com\/blog\/wp-content\/uploads\/blockchain-infrastructure-600x289.jpg 600w, https:\/\/www.cigniti.com\/blog\/wp-content\/uploads\/blockchain-infrastructure.jpg 771w\" sizes=\"(max-width: 555px) 100vw, 555px\" \/><\/span><\/b><\/p>\n<ul>\n<li data-leveltext=\"\uf0a7\" data-font=\"Wingdings\" data-listid=\"10\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\">\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"7\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"none\">Transaction Speed<\/span><span data-contrast=\"none\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559685&quot;:360,&quot;335559731&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">Blockchain payments are completed in near to real-time \u2013 in seconds rather than days. The ability to transfer money instantaneously helps businesses be more responsive, acting on or addressing customer needs without waiting for funds to come through.\u202f<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"8\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"none\">Transaction Cost<\/span><span data-contrast=\"none\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559685&quot;:360,&quot;335559731&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">Eliminating the need for intermediaries reduces the fees for sending cross-border payments. The fees paid by transacting parties are now limited to charges imposed by the distributed ledger technology-based solution operator.\u202fCompanies using<\/span><span data-contrast=\"auto\"> blockchain in payment processing <\/span><span data-contrast=\"auto\">only need to pay a nominal fee, which is almost nothing.<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"9\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"3\" data-aria-level=\"1\"><span data-contrast=\"none\">Transaction Security<\/span><span data-contrast=\"none\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559685&quot;:360,&quot;335559731&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">With a <\/span><span data-contrast=\"auto\">blockchain payment system<\/span><span data-contrast=\"auto\">, all transaction records are secured by cryptography, tied to previous transactions, and distributed among participants through a ledger. A channel-based private and closed communication is laid down among the participants (buyers, sellers, and peers) to endorse, validate, and commit transactions.\u202f\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335557856&quot;:16777215,&quot;335559685&quot;:720,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Network participants have their private keys, which act as digital signatures, assigned to their transactions. If a record is altered, then the digital signature becomes invalid. This results in the peers identifying that something has occurred.\u202f\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335557856&quot;:16777215,&quot;335559685&quot;:720,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Since blockchain is decentralized and operates across a peer-to-peer network, the ledger is updated and synched amongst the participants. It means that there is no single point of failure across the ledger, and changing its state is almost impossible.\u202f\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335557856&quot;:16777215,&quot;335559685&quot;:720,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Altering the data stored on the blockchain requires permission from up to 51% of the participants simultaneously. Also, it requires enormous computing power to compromise the network. To tamper with the data, a hacker must alter all earlier transactions in the ledger.\u202f\u202f<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"10\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"4\" data-aria-level=\"1\"><span data-contrast=\"none\">Transaction Transparency and Visibility<\/span><span data-contrast=\"none\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559685&quot;:360,&quot;335559731&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">In a public blockchain solution, while a user&#8217;s identity is hidden, each address&#8217;s transactions are open to view. With an explorer and a public address, individuals, auditors, and regulatory authorities can view all transactions carried out by that address.\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335557856&quot;:16777215,&quot;335559685&quot;:720,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">On the other hand, in a private blockchain solution, the details are only viewable by allowed participants involved in a transaction.\u202fAll business logic is programmed as smart contracts on the network. All acknowledgments are captured as events, so there is complete transaction transparency and visibility.\u202f<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"11\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"5\" data-aria-level=\"1\"><span data-contrast=\"none\">Data Integrity<\/span><span data-contrast=\"none\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559685&quot;:360,&quot;335559731&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">Blockchain eliminates the risk of discrepancies in record keeping. As a decentralized ledger, it holds a verifiable and irreversible record of every transaction and distributes it to all authorized users. The ledger is maintained and updated communally by a group of connected computers, and all parties have an identical copy of the ledger.\u202f\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335557856&quot;:16777215,&quot;335559685&quot;:720,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">The use of distributed ledgers reduces data discrepancies, facilitates quicker reconciliation, and eliminates or reduces prolonged back-office activities. Compliance is also simplified in a distributed ledger system.\u202f<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"12\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"none\">Encourages competition and innovation<\/span><span data-contrast=\"none\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559685&quot;:360,&quot;335559731&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">The emergence of blockchain technology and blockchain-based payment firms has pressured existing cross-border payment institutions. This healthy competition will lead to innovation, which will benefit end users.<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"13\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;multilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"none\">Immune to censorship by a central governing body<\/span><span data-contrast=\"none\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559685&quot;:360,&quot;335559731&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"auto\">In peer-to-peer blockchain architecture, there is no strict control of a central governing body as of date, which is advantageous for such global transactions. Also, banks or governments cannot drain or freeze virtual currency wallets today.\u202f<\/span><\/p>\n<p><span data-contrast=\"auto\">From the above, we can see that implementing blockchain for cross-border peer-to-peer payments solves the pain points of the use case. All the major pain points discussed above and how they are being solved by blockchain are tabularized below.\u202f<\/span><\/p>\n<table data-tablestyle=\"MsoNormalTable\" data-tablelook=\"1184\" aria-rowcount=\"10\">\n<tbody>\n<tr aria-rowindex=\"1\">\n<td data-celllook=\"69905\"><b><span data-contrast=\"auto\">Pain Points of the Payment Industry<\/span><\/b><span data-contrast=\"auto\">\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:2,&quot;335551620&quot;:2,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/td>\n<td data-celllook=\"69905\"><b><span data-contrast=\"auto\">\u202fHow Blockchain is solving it<\/span><\/b><span data-contrast=\"auto\">\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:2,&quot;335551620&quot;:2,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/td>\n<\/tr>\n<tr aria-rowindex=\"2\">\n<td data-celllook=\"69905\"><span data-contrast=\"auto\">Takes one to five days for successful transaction processing\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/td>\n<td data-celllook=\"69905\"><span data-contrast=\"auto\">Real-time payments\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/td>\n<\/tr>\n<tr aria-rowindex=\"3\">\n<td data-celllook=\"69905\"><span data-contrast=\"auto\">Multiple intermediaries create friction and bottlenecks\u202f\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/td>\n<td data-celllook=\"69905\"><span data-contrast=\"auto\">Zero Intermediaries\u202f\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/td>\n<\/tr>\n<tr aria-rowindex=\"4\">\n<td data-celllook=\"69905\"><span data-contrast=\"auto\">Expensive due to Commissions\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/td>\n<td data-celllook=\"69905\"><span data-contrast=\"auto\">Reduced Remittance cost to 2-3% of\u202ftotal amount\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/td>\n<\/tr>\n<tr aria-rowindex=\"5\">\n<td data-celllook=\"69905\"><span data-contrast=\"auto\">Some service providers charge a 2 to 3% fee\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/td>\n<td data-celllook=\"69905\"><span data-contrast=\"auto\">Reduced cost\u202f\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/td>\n<\/tr>\n<tr aria-rowindex=\"6\">\n<td data-celllook=\"69905\"><span data-contrast=\"auto\">Lack of transparency\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/td>\n<td data-celllook=\"69905\"><span data-contrast=\"auto\">A high degree of transparency\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/td>\n<\/tr>\n<tr aria-rowindex=\"7\">\n<td data-celllook=\"69905\"><span data-contrast=\"auto\">Save information which might not seem safe\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/td>\n<td data-celllook=\"69905\"><span data-contrast=\"auto\">Security concerns have been addressed since\u202fthe decentralized\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/td>\n<\/tr>\n<tr aria-rowindex=\"8\">\n<td data-celllook=\"69905\"><span data-contrast=\"auto\">Denial of Service attack\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/td>\n<td data-celllook=\"69905\"><span data-contrast=\"auto\">Immune to\u202fDenial of Service\u202fattacks\u202f\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/td>\n<\/tr>\n<tr aria-rowindex=\"9\">\n<td data-celllook=\"69905\"><span data-contrast=\"auto\">Difficulty to support conversion to native\u202fcurrencies\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/td>\n<td data-celllook=\"69905\"><span data-contrast=\"auto\">Ease of currency conversion\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/td>\n<\/tr>\n<tr aria-rowindex=\"10\">\n<td data-celllook=\"69905\"><span data-contrast=\"auto\">No Cross-border payments in case of the availability of correspondent banks\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/td>\n<td data-celllook=\"69905\"><span data-contrast=\"auto\">No geographical limitations\u202f<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><b><span data-contrast=\"none\">Conclusion<\/span><\/b><span data-contrast=\"none\">\u202f<\/span><span data-contrast=\"none\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335557856&quot;:16777215,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Trust and transparency are the keys to payment transactions, and blockchain provides the same. However, enterprises adopting blockchain deal with privacy and security concerns, fear about the blockchain integration process, integration challenges with legacy systems, high energy consumption, and high initial investments.\u202f\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335557856&quot;:16777215,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">By enabling real-time, cross-border payments with reduced friction and expedited settlement, blockchain empowers financial institutions to deliver enhanced customer experiences and drive financial inclusion for the unbanked.<\/span><span data-contrast=\"auto\">\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335557856&quot;:16777215,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Cigniti is one of the few IT service providers to have invested in a couple of its blockchain sandboxes across Hyperledger Fabric and R3 Corda technologies. These sandboxes are designed to quickly create a viable prototype for any business application, providing a ready environment to test the concept&#8217;s viability and its configuration&#8217;s effectiveness.\u202f\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335557856&quot;:16777215,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Cigniti offers targeted testing services for applications that include comprehensive validation methods across API testing, functional and non-functional testing, integration testing, security testing, compliance testing, and performance testing, and also includes specialized testing features, such as peer\/node testing and smart contract testing.\u202f\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335557856&quot;:16777215,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Cigniti&#8217;s <\/span><a href=\"https:\/\/www.cigniti.com\/services\/blockchain-application-testing\/\"><span data-contrast=\"none\">blockchain application testing<\/span><\/a><span data-contrast=\"auto\"> services employ a comprehensive framework to evaluate the quality and security of blockchain-based applications rigorously. By implementing cutting-edge tools and methodologies, Cigniti&#8217;s experts ensure these transformative blockchain solutions&#8217; seamless integration, scalability, and resilience, empowering clients to grow securely.\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><a href=\"https:\/\/www.cigniti.com\/blog\/future-payments-virtual-augmented-world\/\"><span data-contrast=\"none\">As the future of payments<\/span><\/a><span data-contrast=\"auto\"> is becoming more secure and seamless, Cigniti&#8217;s expertise in blockchain testing helps clients solve complexities and capitalize on the immense potential of this disruptive technology.\u202f<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335557856&quot;:16777215,&quot;335559739&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Need help? Schedule a discussion with our <\/span><a href=\"https:\/\/www.cigniti.com\/industries\/banking\/blockchain-testing\/\"><span data-contrast=\"none\">Blockchain Testing experts<\/span><\/a><span data-contrast=\"auto\"> to learn more about Hyperledger Fabric and R3 Corda, identify the typical blockchain project&#8217;s issues, and how Cigniti can help make the blockchain compliant.\u202f<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Digital security has always been an issue for payment organizations and their customers. Transparent and immediate payment is the basic need. Payments need to be made easy, fast, and highly secure to enhance and popularize digital payments and be more customer-focused.\u202f\u00a0 Blockchain technology has developed a solution that addresses payment security needs and transaction transparency [&hellip;]<\/p>\n","protected":false},"author":20,"featured_media":17034,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[2261,732],"tags":[2265,2270,2262,4092,4095,4094,2266,2267,4093,2271,2268,2264,2269,2272],"ppma_author":[3966],"class_list":["post-17033","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blockchain-testing","category-bfsi-testing","tag-blockchain-app-testing","tag-blockchain-application-testing","tag-blockchain-implementation","tag-blockchain-in-banking","tag-blockchain-in-retail-banking","tag-blockchain-solutions-for-banking","tag-blockchain-test-automation","tag-blockchain-testing-framework","tag-blockchain-testing-in-banking","tag-blockchain-testing-services","tag-blockchain-testing-strategy","tag-testing-blockchain","tag-testing-blockchain-applications","tag-testing-blockchain-apps"],"authors":[{"term_id":3966,"user_id":0,"is_guest":1,"slug":"payel-ghosh","display_name":"Payel Ghosh","avatar_url":{"url":"https:\/\/www.cigniti.com\/blog\/wp-content\/uploads\/Payel-Ghosh.jpg","url2x":"https:\/\/www.cigniti.com\/blog\/wp-content\/uploads\/Payel-Ghosh.jpg"},"user_url":"","last_name":"Ghosh","first_name":"Payel","job_title":"","description":"Payel Ghosh has 18 years of experience in diverse technology projects in the banking and payments domain. She has rich experience and knowledge in the payments value chain and in-depth subject matter expertise in payment processing. Payel is a consultant with Cigniti's BFSI Practice and Centers of Excellence that focuses on building deep domain competence and developing solutions for the challenges faced by the industry."}],"_links":{"self":[{"href":"https:\/\/www.cigniti.com\/blog\/wp-json\/wp\/v2\/posts\/17033"}],"collection":[{"href":"https:\/\/www.cigniti.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cigniti.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cigniti.com\/blog\/wp-json\/wp\/v2\/users\/20"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cigniti.com\/blog\/wp-json\/wp\/v2\/comments?post=17033"}],"version-history":[{"count":0,"href":"https:\/\/www.cigniti.com\/blog\/wp-json\/wp\/v2\/posts\/17033\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.cigniti.com\/blog\/wp-json\/wp\/v2\/media\/17034"}],"wp:attachment":[{"href":"https:\/\/www.cigniti.com\/blog\/wp-json\/wp\/v2\/media?parent=17033"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cigniti.com\/blog\/wp-json\/wp\/v2\/categories?post=17033"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cigniti.com\/blog\/wp-json\/wp\/v2\/tags?post=17033"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.cigniti.com\/blog\/wp-json\/wp\/v2\/ppma_author?post=17033"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}