Business Owners Should Ditch PayPal and Move to Blockchain

Business Owners Should Ditch PayPal and Move to Blockchain

Do you think that in five years, every second transaction in e-commerce will be settled on the blockchain? number? Well, that’s what people thought about plastic credit cards versus cash a few decades ago when it came to traditional stores.

There is no doubt that Web3 will fundamentally change the way e-commerce works. The use of cryptocurrency payments in e-commerce stores will become as popular as accepting PayPal, Klarna, Visa or Mastercard. Stores that do not adapt their e-commerce platforms to accept cryptocurrency will soon find themselves out of business.

How Web3 has changed the e-commerce landscape

Thanks to the converging powers of Web3 – blockchain, decentralized finance (DeFi), artificial intelligence, and machine learning – new intelligent algorithms can analyze and adapt to provide user-centric experiences. In addition, Web3 will be more comprehensive than previous web versions. The decentralized nature of Web3 creates an ideal platform for the rapid and transparent flow of information that is not censored by a central authority.

In addition, Web3 eliminates middlemen like Facebook who take a portion of users’ money (and their personal data) when they buy something online. At the same time, all the details of our transactions are public – for better or worse. Enhancing the security and convenience of online transactions will increase the volume of e-commerce transactions and encourage businesses to adopt crypto payments.

Related: Latin America is ready for cryptocurrency – just integrate it with their payment systems

As more companies move from Web2 to Web3, many merchants and consumers are starting to use crypto payment solutions.

On Web2, most online payment platforms like PayPal and Stripe charge a transaction fee of around 4%. This, of course, makes it difficult for companies to remain competitive without raising prices. Crypto payments are not only frictionless but also gaining traction as a payment method. With today’s stablecoins, people no longer have to worry about switching to fiat currencies and the hassle of withdrawing money to their bank accounts.

The power of blockchain in old and new business models

Similar to the adoption of Web2 e-commerce, there is a long way to go before Web3 can provide the full range of benefits mentioned earlier. However, the introduction of smart contracts and Web3 platforms such as Hyperledger has dramatically changed the value exchange landscape. Hyperledger Fabric is developed by organizations like IBM for specific business cases that improve supply chain operations. Accessing the ledger using Fabric allows companies to view the same immutable data, ensuring accountability and reducing the chance of fraud.

Consumers can keep up with the progress of their orders and trace each item back to its origin. At the same time, supply chain operators can monitor inventory levels and shipments and take appropriate actions to solve problems and detect fraud. This allows the consumer and the company to anticipate delivery at a certain time. All packages can be easily monitored via the blockchain explorer while protecting customer privacy.

Additionally, using the blockchain, a global whitelist of real and trusted customers and suppliers can be created and possessed, something Unstoppable Domains does through Web3 identity verification. This whitelist reduces false positives and helps detect actual fraud. Unlike traditional e-commerce payments, Web3 allows people to place their orders easily by eliminating middlemen and chargebacks.

New regulatory environment

The emergence of Web3 in e-commerce will change compliance requirements related to personal data, including the EU’s General Data Protection Regulation, raising important questions such as identity authentication without revealing personal and sensitive information.

However, Web3 developers have already experimented with using zero-knowledge proofs as a solution to prove that they own certain information (such as nationality or age over limit) without revealing details.

Customers do not necessarily have to decide how much personal data they will provide. This will only happen if companies adopt the viable technology and regulators allow it. However, it may not happen unless someone is willing to make an argument in their favour.

Related: PayPal Allows Transfer of Cryptocurrency to External Wallets

With such enormous possibilities, more companies should consider jumping on the Web3 bandwagon. After all, they can raise their level of transparency, reputation, and cost management in the e-commerce game to stay ahead of the curve while moving digital data safely and freely across borders. For this to happen, clear regulations must be put in place to support the broader adoption of blockchain technology in this field.

Companies will also have an essential role to play in the world of Web3: ensuring that they are equipped with the latest security solutions to prevent themselves from becoming a target for cybercriminals. Recently, cybercrime has seen hackers steal funds, as well as personal personal information of customers, which inevitably damages the reputation of the organization.

Having the latest tools and systems will not mean much without a sufficiently qualified team of information security professionals to ensure that vulnerabilities in key systems are addressed in a timely manner, and that key controls are tested on a regular basis. Sufficient resources and attention must certainly be devoted by Web3 companies in order to address these areas of risk in the course of their business.

Raymond Hsu He is the co-founder and CEO of Capital, a cryptocurrency wealth management platform. Prior to co-founding Capital in 2020, Raymond worked for fintech and traditional banking institutions, including Citibank, Standard Chartered, eBay and Airwallex.

This article is for general information purposes and is not intended and should not be considered legal or investment advice. The opinions, ideas and opinions expressed here are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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