The Problems of Existing Electronic Payments
The existing electronic payments are controlled by centralized industry giants , causing numerous problems such as complicated and blurry rules, discretional right, inefficient dispute management and high fees, etc.
The traditional electronic payment ecosystem involves too many intermediate links and there are many problems. e.g:
- Cross-border transactions are costly and inefficient
- Items of expenses
- A large number of transactions are unable to proceed because there is no trust between the two parties, and the centralized giant does not provide guarantee services and payment channels.
- Opaque access rules for merchant/consumer
- Serious security and privacy issues
- Long processing of transaction disputes
- Cumbersome process of reconciliation, settlement and clearing
For example, Chinese game developers are targeting products in the Southeast Asian market. They face various risks in payment:
- Local payment costs are high
In Southeast Asia and India, bank card and credit card penetration rate is low. The local mainstream payment method is the operator’s call charge, prepaid card recharge, etc. The cost of some payment channels is up tp 30%-50%. They usually need multiple payment channels to lower the cost.
- Difficult in returning funds back home
The fees charged by the overseas content platform through different payment channels can only be reached locally. For the funds to go back to China, it is required to solve the foreign exchange control problem and pay high taxes.
- Another typical example:
A multinational retailer in the Asia-Pacific region has retail stores and a unified retail management system in Sydney, Hong Kong, Dubai, Bangkok, Singapore, and Kuala Lumpur. In order to facilitate unified management, it is hoped to achieve unified receipt in various regions, but it faces many problems.
Since the acceptance of credit cards and wallets requires authorization from the card organization and the wallet issuer, and these authorizations are granted by country region and card variety, the retailer owns eight service agencies in the Asia Pacific region.
The service standards, clearing time, rates and surcharges of each service organization are different, and the adjustment of accounts due to the exchange rate conversion in multi-currency is also different, which brings a lot of work to the supplier management, financial management, tax planning and inventory management of this multinational retail enterprise.
Under the existing electronic payment structure, the efficiency of payment is low and the overall payment cost is high. The most important thing is: merchants and cardholders have no choice, no right of discourse, pricing or even knowing in the old ecosystem.
The centralized organization that holds power does not focus on the user experience, payment product innovation, merchants, and user interests. In the long run, the traditional payment industry has become stagnant, and it is urgent for it to be replaced by new forces.
The decentralization, de-trust, open and transparent, consensus-based, traceable, and tamper-proof features of the blockchain have brought huge innovation opportunities to the reform of the payment industry, allowing merchants, consumers, and relevant participants in the payment industry to enjoy the benefits of an open, fair and low cost featured unrestricted trade.