Consumers are becoming more apprehensive and skeptical when conducting online transactions because of the various scams entangled with them.
Lowering the risk of identify theft
From identity theft and fraudulent transactions to online marketplaces not providing enough security to either party, both consumers and sellers are becoming more hesitant to part with their money through online transactions. According to Brigid McDermott, VP of blockchain for IBM, "Blockchain is a trusted system of records."
Therefore, blockchain payment startup UTrust aims to solve such payment and trust issues. Having recently successfully raised more than $1.5 million in 90 minutes during its pre-initial coin offering (ICO) sale in late August, the company is a step closer in its bid to bring back the trust between consumers and merchants.
Can online transaction risks be minimized?
According to Goldman Sachs, blockchain technology is redefining the way we transact and it has far-reaching potential to change the way we sell and buy. The technology combines the openness of the internet with the security native to cryptocurrency.
According to UTrust CEO Nuno Correia, the company intends to establish an infrastructure that will offer fast, secure, convenient, and affordable digital currency transactions. With this in mind, both entrepreneurs and consumers will then be able to gradually reinstill the trust in their online transactions.
"We aim to create an infrastructure that provides the benefits of fast, secure, convenient, and inexpensive cryptocurrency transactions alongside the world's first cryptocurrency payment protection system," Correia says. "Our goal is to democratize the world of altcoins and blockchain technology to ensure that anyone can benefit from instantaneous, transparent, and cost-effective transactions, irrespective of where they live and level of education."
Reestablishing trust between consumers and sellers
With increasing numbers of cases of online identify theft and fraud, the company aims to empower consumers to pay with digital currencies. To protect the buyers, the company will be introducing a purchase protection mechanism that helps minimize the risk of scams and fraud by providing full payment protection, acting as a third-party mediator during the transaction, and ensuring the delivery of the paid-for product or service.
Protection from price swings
By tapping into a market that is underserved by blockchain, payment solutions powered by blockchain technology help protect both sellers and buyers from price swings.
There are limitless applications for blockchain technology. In fact, banks around the world have been using the same technology that powers cryptocurrencies to optimize their existing processes. With the increasing demand to ensure safety in online transactions, businesses need to take more control and better precautionary measures to avoid incurring costs associated with fraudulent transactions.
More secure transactions
As a trustless network, no person has the ability to make significant changes within the blockchain system, removing possibilities of transactions getting rigged. More so, two parties are able to make an exchange without the oversight or intermediation of a third party, strongly reducing or even eliminating counterparty risk.
Blockchain technology is not only transforming banks and the way both consumers and sellers are making transactions online, but it also adapts bank regulation and supervision. It enables banks to track the progressive history of every transaction on their systems to ensure that the origin, the ultimate destination, and the use of funds are traceable and clear.
Ultimately, blockchain is leading the way for a wave of tech-based financial innovation that allows for much more efficient transactions and protection between merchants and buyers. It places the customer at the center of business, and it focuses on the ultimate endgame, which is leveraging blockchain to prevent disruption as well as ensure that both parties benefit from such a secured transaction.
As intermediaries are removed from transactions, counterparties can independently transact and verify the data on a ledger without having to hire expensive third parties to manually perform such tasks, helping to lower costs in the process.
While it may take time for most traditional institutions to fully account for the benefits of the blockchain, only few can sit on the sidelines, as this technology can positively change how we do payment and online transactions.