Blockchain Payment :Better Dimension

Arb Raj
Aug 24, 2019   •  7 views

In Bank payment system a transaction process takes 2-3 days to reach a settlement in several cases. Whenever you do a transaction using debit/credit card or net banking, the amount is deducted from your account immediately but it still takes 2 business days to reach the account of the merchant.


  1. Technically, distributed systems process transactions in batches and the deducted amount is kept on hold and released turn wise. These distributed systems also interact with other banks systems to process transactions in the country and across countries.

  2. "Bank Greed", on every transaction bank tries to make money by lending the money kept on hold to other banks, and making a profit on the interest, this is known as "over the night lending".

  3. Risk Mitigation: Banks hold the amount for a period of time in order to deal with any refund, fraud transactions etc, so that trust on the 3rd party can be maintained.


Blockchain based payment system is a peer to peer decentralized technology, that enables 2 parties exchange value (currency, info) without the need of any intermediaries like banks. The value transfer process is validated using a consensus algorithm, (like proof of work, proof of stakes). This process is fast, has low transaction fees (in case of the overseas transaction) and reliable (no chance of frauds). And even situations like payback claims, refunds can also be managed using smart contracts all over the blockchain. (Fact: A e-commerce refund usually takes 2-3 business days on normal payment system).

So what's the better option? Legally we cannot use Bitcoin for value transfer, but technically banks can adopt blockchain transactions to process transaction and mitigate the risk associated with the archaic system.
Hopefully, this has been started. Axis bank has started using Ripple blockchain based instant payments, and many other financial institutions have started using blockchain for value store/transfer.

But the real revolution will start as we soon take step towards a complete decentralized governance and societal control.