Businesses Should Ditch PayPal and Move to the Blockchain

Do you think that within the next five years, every other transaction that takes place in online commerce will be settled using blockchain technology? No? When it came to conventional stores a few decades ago, that was the general consensus regarding the use of plastic credit cards as opposed to cash payments.

There is no shadow of a doubt that Web3 will bring about a dramatic shift in the manner in which e-commerce is conducted. The acceptance of cryptocurrency payments in online shops will eventually reach the same level of standardization as other payment methods such as PayPal, Klarna, Visa, and Mastercard. Those retailers who do not modify their online shopping platforms in order to accept cryptocurrencies will quickly find themselves unable to stay in business.

How Web3 is Shaping the E-Commerce Landscape

Blockchain, decentralized finance (DeFi), artificial intelligence, and machine learning are some of the forces that are converging to form Web3, and as a result, new, intelligent algorithms can analyze and adapt to provide user-centric experiences.

Additionally, in comparison to earlier iterations of the World Wide Web, Web3 will feature significantly improved accessibility. The decentralized nature of Web3 makes it the ideal platform for the free flow of information that is both quick and open, and it does so without being subject to the censorship that can be exercised by a centralized authority.

When users make purchases online, intermediaries such as Facebook often take a portion of their money as well as their personal information. Web3 does away with these middlemen. At the same time, all the particulars of our dealings are out in the open, whether this is a positive or negative development. Boosting the safety of online transactions while also making them more convenient will lead to an increase in the volume of transactions conducted through e-commerce and will encourage businesses to adopt crypto payments.

A growing number of businesses are transitioning from Web2 to Web3, which has led to an increase in the number of consumers and merchants using crypto payment solutions.

In Web 2, the vast majority of online payment platforms, such as PayPal and Stripe, assess a transaction fee of approximately 4%. Naturally, this makes it challenging for businesses to maintain their competitive edge without resorting to price increases. Not only are cryptocurrency transactions completely frictionless, but they are also gaining popularity as a method of payment.

People no longer have to be concerned about converting their cryptocurrency holdings into fiat currency or going through the hassle of withdrawing funds to their bank accounts because stablecoins are now available.

The Blockchain’s Power in Both Old and New Business Models

As was the case with the widespread adoption of e-commerce on Web2, there is still a long way to go before Web3 can deliver the complete set of advantages that were discussed earlier. The introduction of smart contracts and Web3 platforms such as Hyperledger, on the other hand, has brought about a dramatic shift in the landscape of value exchange.

Enterprises such as IBM have developed Hyperledger Fabric for specific business cases that optimize supply chain operations in order to meet customer demand. Businesses are able to view the same data that cannot be altered when they use Fabric to gain access to the ledger. This ensures that accountability is met and reduces the likelihood of counterfeiting occurring.

Customers are able to monitor the status of their orders and discover the country of origin for any product they purchase. During the same time period, operators of the supply chain are able to monitor inventory levels and shipments, take the appropriate action to resolve issues, and detect fraud. Both the customer and the business are able to plan their activities more effectively as a result of this ability. While the privacy of each individual customer is maintained, the blockchain explorer makes it possible to easily monitor all of the packages.

Additionally, blockchain allows for the creation and ownership of a global whitelist of authentic or reliable customers and vendors, something that Unstoppable Domains is currently doing with its identity verification for Web3. A whitelist of this kind helps detect actual fraudulent activity while simultaneously reducing the number of false positives. Web3 eliminates the need for intermediaries and chargebacks, making it much simpler for customers to place orders online than with conventional methods of online payment processing.

A New Regulatory Environment

The introduction of Web3 in e-commerce will bring about a change in the compliance requirements related to personal data, including the General Data Protection Regulation of the European Union. This will bring up important questions, such as how identity can be authenticated without revealing private, sensitive information.

However, Web3 developers are already experimenting with the use of zero-knowledge proofs as a solution to the problem of proving to the other party that they are in possession of certain information (such as being of a certain nationality or being older than the limit) without actually disclosing the specifics of that information.

The decision regarding how much of their personal information customers are willing to share will not necessarily be left up to the customers themselves. That is only going to occur if businesses adopt the relevant technology and government regulators give their approval for it. Nevertheless, there is a possibility that this will not occur unless somebody is willing to make an argument in favor of it.

Because it opens up such a wide range of opportunities, more companies should seriously consider joining the Web3 bandwagon. After all, they have the ability to improve their level of transparency, reputation, and cost management in the e-commerce game, allowing them to stay one step ahead of the competition while also safely and freely moving digital data across international borders. In order for this to take place, there needs to be a clear set of regulations developed to back the widespread adoption of blockchain technology in this sector.

In the world of Web3, businesses would also have an important role to play, and that role would be to ensure that they have the most up-to-date security solutions available to them in order to protect themselves from becoming the target of cybercriminals. In recent instances of cybercrime, hackers have been seen making off with funds as well as the personal private information of customers, which invariably leads to damage done to the organization’s reputation.

If you do not have a sufficiently staffed team of information security professionals to ensure that key system vulnerabilities are addressed on a timely basis and that key controls are subjected to testing on a regular basis, having the most up-to-date tools and systems won’t mean much for your organization’s level of information security. In order for Web3 companies to address these potential sources of risk during the course of their business, they will undoubtedly need to commit the necessary time and energy as well as sufficient resources.

Disclaimer:Β The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of EGG Finance. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.