How Blockchain Micropayment Transforms Payment System?
Blockchain essentially is a decentralized growing list of records of all crypto-currency transactions. It uses a distributed ledger technology to record information in a permanent, unalterable and verifiable manner and is perfectly secure by design. Invented by Satoshi Nakamoto in the year 2008, Blockchain was basically designed to record transactions of the cryptocurrency bitcoin but has now further been evolved to be utilized by Micropayments System as well. Micropayment platforms help consumers to make small payments while making online transactions conveniently, safely, confidentially and efficiently for purchasing cheaper goods and services from merchants online. It emerged as an alternative payment option to credit and debit cards payment services and help consumers to buy cheaper items and products as well as support merchants to expand their business to such items involving micro payments.
Introduced around the 1990s, Micropayment platforms gained popularity in the 2010s with the introduction of platforms like Satoshi Pay, M-Coin, PayPal, Flattr, Swish, GNU Taler, etc. and have been growing since then. But there are still a number of roadblocks like the high transaction fees due to credit risk, storage cost, processing cost, bookkeeping; registrations; delay in payment; system complexity, etc. which affects the overall success of this system. To successfully clear these roadblocks and utilize Micropayment systems to their full capacity, blockchain comes into existence. With some of the Blockchains, you could avoid third-party payment platforms altogether and get paid in terms of tokens in your crypto wallet which can be further utilized to purchase other products and services or making crypto transactions(involving very small transactional charges). Crypto transactions do not just have the advantage of low transaction fees but are also available 24×7, essentially helping the users in getting payment in the forms of token credited in their account in as short as a couple of minutes. With an easy-to-understand User Interface and less complex policies and processes, making online transactions involving micro payments could never have been easier. Also by using the Blockchain methodology, a number of small transactions can now be clubbed together to reduce the overall transaction fee instead of charging the consumers on every single micro-payment transaction that they make on the merchant’s online site.
Looks like by utilizing the capabilities of Blockchain methodology, the problem areas of using micropayment platforms can be greatly reduced eventually leading to a bright future for the Micropayment systems available in the market.