Merchant Payment Platforms Now Seeing Cryptocurrency as Cash
FinancialNewsMedia.com News Commentary
PALM BEACH, Florida, April 10, 2019 /PRNewswire/ -- New merchant processing and point of sale platforms have been introduced into the market at a rapid rate over the last few years. A recent industry report said: "Money and the idea of its exchange through payments have evolved a lot from the time of its inception… Over the last decade or so, payment technologies have grown at a dizzying pace… Payments are now evolving at a rapid pace with new providers, new platforms, and new payment tools launching on a near daily basis. This shift precipitates a need for retailers to adapt toward fast, simple and secure mobile payments… It's predicted that by 2025, 75% of all transactions will be made without cash." Cryptocurrency is one of those new methods. The same report added: "A cryptocurrency-based global payment solution would… work very differently from credit cards and other online transfers. Instead of the payment being authorized by the owner and then taken from the account by the recipient, the owner transfers the coins directly to the recipient – a "push" model, rather than an "authorize and pull" model. Cryptocurrency-based global payment solutions offer the possibility of vastly improving the speed and security of international payments while reducing transaction costs… To make the payment, of course, the owner must have enough coins in the wallet. Active Companies in the industry include NetCents Technology Inc. (CSE:NC) (OTC:NTTCF), Fiserv, Inc. (NASDAQ:FISV), PayPal Holdings, Inc. (NASDAQ: PYPL), Pareteum Corporation (NASDAQ: TEUM), Square, Inc. (NYSE: SQ).
Cryptocurrency payments work in much the same way as cash. The owner keeps their coins in a secure digital wallet to which only he/she has the "key" – a digital signature that only the owner knows. The wallet can receive payments without being opened, but to make a payment the owner must open the wallet with the key. To make things extra safe, some wallets have multiple keys: for example, a wallet might have three digital signatures, one held by the owner, a second held by a trusted third party and a third in offline ("cold") storage. Making a B2B payment from one of these "multisig" wallets requires two or more keys, not just one. This is not unlike business checks that must be countersigned to be valid for payment.