Existing payments like FedNow systems are hard to beat, but there may be niches where blockchain companies can play, says EY’s Paul Brody.
Main breakdowns of the content’s key points:
- Blockchain payments are not appealing for basic payment services due to slower execution and higher costs compared to centralized systems.
- Fees for blockchain payments on Bitcoin and Ethereum are higher and more variable compared to traditional inter-bank methods.
- Blockchain payments lack advanced features that retailers depend on, such as chargebacks, refunds, and loyalty points.
- The high fees and lack of services in cross-border remittances are not technological issues, but rather regulatory, infrastructural, and competitive obstacles.
- Blockchain payments have exceptional value in non-traditional fiat money transactions and in integrating payments with the delivery of goods.
Hot Take:
Instead of trying to replace existing payment systems, blockchain and crypto businesses should focus on areas where they offer unique advantages and added value to consumers and businesses. The flexibility and programmability of blockchain ecosystems can provide benefits in complex transactions and integration across different systems.
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