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The Future Of Blockchain Based Payments With WadzPay

June 11, 2024
The Future Of Blockchain Based Payments With WadzPay

Blockchain-based distributed ledger technology addresses the growing need for more efficient, secure, and inclusive payment solutions, providing a better alternative to legacy payment processing technologies and solutions. 

To understand the scope and impact of blockchain-based payments on your business, let’s explore how this innovative technology can revolutionise your business model, adding significant value and potential.

How Blockchain Technology Deals with the Shortcomings of Traditional Digital Payments

The current financial infrastructure is centralised, heavily controlled, and riddled with inefficiencies. Traditional digital payments industry has intermediaries which leads to high processing and transaction fees and slow transactions.

Cross-border payments have to address the added complexity of regulations and correspondent banks. If someone wants an international wire transfer, it takes ‘days’ whereas customer expectation is ‘hours’ if not ‘instant’. Also, such cross-border remittance has high charges which is burdensome to migrant labour who transfer part of their hard-earned money back to their families in their home country.

The traditional payment system also suffers from frauds and security risks as evident from a recent report in CBC News about transfer frauds worth USD 1.5 billion at BMO.

Blockchain technology effectively substitutes legacy technology with multiple ‘hops’ and scheme-driven traditional payment systems by offering a decentralised, immutable, and transparent payment platform.

Blockchain addresses the shortcomings of traditional digital payments in the following ways:

  • It enables faster, cheaper, and more secure transactions by eliminating gatekeepers and automating verification.
  • Its secure, shared ledger removes intermediaries, streamlines processes, and reduces payment processing fees

Use Cases of Blockchain in Payment Processing 

1. Banking and Finance 

Blockchain streamlines interbank settlements by creating a shared ledger, eliminating the need for multiple confirmations. It also revolutionises trade finance by automating processes like letter of credit issuance, improving efficiency and security. Institutions like J.P. Morgan’s Onyx and DBS already leverage blockchain for faster settlements and trade finance solutions.

2. Merchants 

For merchants and retailers, blockchain cuts processing fees by eliminating intermediaries and automates fraud checks with its secure ledger. This reduces chargebacks and fraud attempts. 

3. Governments

Blockchain enhances transparency and efficiency in government payments. Adding security and trackability can potentially improve government functions like welfare distribution, public services, and tax collection. 

The Bahamas launched the SandDollar, the world’s first central bank digital currency (CBDC), in2020, and CBDC testing, and development took off worldwide in 2023.

4. Travel or Pilgrim Program 

WadzPay has launched for a Pilgrim Program which is a cross-border private blockchain tokenization solution for Hajj and Umrah pilgrims. It provides mobile app-based wallets issued by a Bank in pilgrim’s home country using which pilgrims can top-up their pilgrim wallet with SAR credits before travelling for the pilgrimage. These currency credits can be used at all merchant outlets during pilgrimage to the destination country (Saudi Arabia).

Benefits for Pilgrims:
  • Convenience of cashless payments at POS and e-commerce outlets
  • Reduced risk compared to carrying cash, as there is no risk of loss or theft.
  • Efficient purchase and refund processing for returned goods.
Benefits for Issuers, Acquirers, and Merchants:
  • Cost-effective alternative payment method compared to international cards.
  • Hassle-free and transparent settlements between parties.
  • Informative dashboard for all stakeholders


1. How Does Blockchain Help in Virtual Asset Payments?

Blockchain acts as a secure and transparent ledger for virtual assets. Each transaction is verified and recorded publicly, eliminating the need for intermediaries, and reducing settlement times. This allows for faster, cheaper, and more secure peer-to-peer transfers of virtual assets.

2. How Does Blockchain Improve Banking?

Blockchain streamlines interbank settlements by eliminating the need for multiple confirmations, saving time and money. It also automates processes like trade finance, improving efficiency and security. While traditional banks may face disruption, they also explore blockchain for faster transactions and new revenue streams.

Disclaimer: *WadzPay is a B2B technology provider. All regulated activities featured in WadzPay are conducted by licensed entities in applicable jurisdictions.