Managing e-commerce requires many different processes. For example, a company must comply with laws and ensure customers’ personal information is secure.
Blockchain technology can improve these processes by connecting inventory, information, and financial flows. This can help companies reduce costs, increase transparency, and boost trust.
Reduced Fraud
Trillions of dollars slosh around the world in an antiquated system of slow payments and expensive fees.
To combat fraud, payment providers have developed sophisticated fraud detection technologies that use patterns to recognize fraudulent activity. This helps reduce transaction costs and protect customers’ personal information. However, these measures could be more foolproof. Fraudsters continue to evolve their attack strategies, and the industry must continually adapt to keep up. In 2021 alone, the card industry reported a $443 billion loss from fraudulent transactions.
Blockchain technology is a tool for reducing this fraud. By using blockchain, businesses can share transaction data with all stakeholders. This visibility reduces the risk of disputes and fraud and makes tracking and resolving issues easier.
A blockchain system also improves supply chain management. By recording transaction details in a ledger that is visible to all parties, companies can reconcile purchase orders, invoices, and payments much more quickly and track the progress of shipments. This eliminates the need for manual reviews and financial audits, which are time-consuming, costly, and error-prone.
Increased Transparency
In a B2C model, customers purchase goods and services for personal use. This differs from B2B transactions, which are more complex. B2B sales involve multiple people, including technical, business, and financial departments, and require approval before purchasing. This often results in longer payment cycles and higher costs.
However, despite the differences between B2C and B2B payments, businesses and consumers want more transparency in their payment experiences.
A heightened awareness of the benefits digital B2C payments on the blockchain provide fuels this shift, and it’s not just merchants who benefit. Consumers also receive faster access to funds, which is particularly important for underbanked professionals, gig workers, insurance claimants, and other customers whose purchasing power has been impacted by COVID-19.
For example, enabling businesses to disperse funds to consumers via digital value allows them to avoid the time-consuming and expensive process of sending traditional paper checks, which requires fumbling with bank account information and sort codes. Similarly, allowing insurers to send claims disbursement checks into accounts eliminates the need for costly re-issues and allows customers to access their money quickly. This is particularly important for underbanked customers, many of whom could not open new bank accounts during the pandemic due to the closure of stores.
Increased Trust
Business-to-consumer, or B2C, companies typically have more straightforward sales processes than business-to-business brands. But they also need several challenges, including a lack of transparency, extended payment terms, and high transaction costs. By using the blockchain, businesses can streamline transactions and improve customer trust.
The blockchain allows companies to reconcile purchase orders, invoices, and payments much more quickly, eliminating costly manual reconciliations between banks and suppliers. Additionally, it helps businesses track inventory and make payments in real-time. Moreover, the immutability of the blockchain makes it easy to identify fraudulent activities.
As blockchain technology evolves, businesses find innovative uses in e-commerce and online payments. For example, e-commerce marketplaces can use the blockchain to store and share private customer information securely without risking privacy violations. This can save them money on expensive processing fees, chargebacks, and manual reconciliations.
Another exciting development is the emergence of blockchain-enabled cross-border payments. While these payments are still relatively new, they have the potential to revolutionize the global payments industry. Unlike traditional fiat-based cross-border payments, blockchain-enabled payments are secure and fast. Additionally, they provide a secure way for businesses and consumers to move funds internationally.
Enhanced Security
A smooth and hassle-free payment experience significantly impacts customer satisfaction, influencing loyalty and encouraging repeat business. Efficient payment processes also reduce costs associated with manual processing, paperwork, and potential errors. Automating and digitizing your B2C payments enables you to offer multiple payment options, increase speed and efficiency, and ultimately improve profitability.
The global B2C payment market is categorized by transaction mode, industry vertical, and region. In terms of transaction mode, the market is divided into credit cards, digital wallets, and mobile payment applications. The market is segmented by industry vertical into hospitality and transportation, media and entertainment, retail, healthcare, and energy and utilities.
B2B transactions often require businesses to establish relationships with several different parties. For example, a company may order goods from a supplier, manufacturer, or wholesaler. In addition, it may purchase products from a retailer or distributor. These relationships are essential to the success of a B2B company, as they help to ensure that the right products are being delivered to the appropriate customers.
In contrast, B2C companies sell their goods and services directly to consumers. They must create a direct distribution channel, provide a user-friendly online sales platform, and manage recurring subscription payments. In addition, B2C companies must be able to sync up their sales and billing systems. This can be challenging, especially for large and complex B2C payments involving several different stakeholders and payment terms.