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TEMPO Payments: In-Store and Online Retail Payments Done Best by Blockchain

Blockchain’s large utility is finally starting to be realised by fintechs across the globe. Old fashioned payment methods are on their way out, and new digital methods to improve accessibility to financial services are on the rise. The retail industry is starting to capitalise on this as 900 retailers are now accepting cryptocurrencies of some kind; blockchain technology not only improves B2C transactions, but also merchant and supplier ones. 

That short introduction echoes the views of Suren Ayriyan, Managing Partner and CEO at TEMPO Payments when he spoke to The Fintech Times.TEMPO Payments, a European-wide anchor for Stellar blockchain payments, offers online, offline and digital backed remittances to nearly 100 destination countries with over 300 physical agent locations as well as a secure bridge to purchase and sell digital assets. 

Having worked for various financial institutions across the globe, Ayriryan is well placed and experienced on how blockchain technology could have a lasting impact in different areas of the world:

Suren Ayriyan, Managing Partner and CEO at TEMPO Payments
Suren Ayriyan, Managing Partner and CEO at TEMPO Payments

In 2021, blockchain cannot only revitalise payment infrastructures itself but also specific industries such as retail. Globally, we are experiencing an exponential growth of fintechs in eCommerce and medium businesses. Blockchain enhances supply chain management, every sale activity, and improves both in-store and online payments. As a means to decrease transaction fees, blockchain is beneficial for retail overall.

Merchant use of blockchain payments

Undoubtedly, the pandemic accelerated the digital payment ecosystem by leaps and bounds. Online retail sales surged to $794.50billion, a 14.4% increase of total US retail in 2020.

Cryptocurrencies replace the credit card, no wonder the retail adoption of cryptocurrency payments is growing. At least 900 retailers will now accept cryptocurrencies of one kind or another.

As one of few actors providing multiple payment options to consumers, retailers are in fact the ones that can make the greatest impact with blockchain solutions.

And it goes without saying that retailers in the global south and in developing economies, with the most governmental constraints, accessibility limitations for users and overall infrastructural challenges, will create the greatest impact using blockchain-based payments.

The multiple benefits of electronic retail payments

Retail payments are typically payments between consumers, businesses, and public authorities. They are everyday consumer transactions, but also the salary and tax payments made by companies. The key to streamlining a customer experience is integrating the latest technology to reduce customer and revenue churn. This is why blockchain as a secure payment option is essential to the retail industry.

Today, constraints and regulations often prevent us from upholding private obligations and doing business abroad. Laws and regulations from a market, technical and legal perspective are what limit money transactions and payments for retail companies regardless of region. Fast, secure, and easy transactions are the incentive for using blockchain technology both in in-store and online eCommerce.

The benefits of electronic blockchain payments for retailers are: 

  1. Security (cash is more liable to theft, loss, and fraud).

  2. Better and faster assessment of business operations (e.g., cash flows, profit, and loss).

  3. The ability to generate revenue from new channels and digital financial services.

  4. Value-added services that come bundled with payments or make or receive payments (e.g., loyalty, credit, marketing support).

Central banks have traditionally shown interest in retail payments due to their stability and efficiency in preserving confidence in national currencies. But how can independent solutions such as blockchain facilitate payments in the retail industry globally?

How blockchain impacts payment infrastructure

Equal to high cash usage is a fragmented payment infrastructure in a country characterised by regulatory constraints. Constraints that have much to say for further development, growth, and innovation, such as:

  1. An inadequate value proposition for merchants.

  2. Weak product and stakeholder economics in traditional card models.

  3. Insufficient aggregate customer demand needed to reach the “tipping point” that drives demand and supply towards an electronic payments ecosystem.

  4. Inconsistent technological infrastructure and regulatory environment in developing markets to support electronic payments.

  5. Ineffective distribution models to serve hard-to-reach merchants in areas with limited economic infrastructure.

  6. The difficulty in formalising enterprises and reluctance of merchants to pay the full tax on sales.

Depending on the country and its entrepreneurial environment, these factors can determine the number of solutions available to consumers and small and medium merchants. The existing challenges can be solved by facilitating the opening of a transaction account (while protecting customer data privacy), stimulating merchants’ formalisation, and forge private-public partnerships.

The keyword being accessibility as making money transfers available to a significant number of users, regardless of geographic location, also bolsters infrastructure globally. This way, merchants can significantly contribute to strengthening a country’s economy.

The power of retail fintech

In developing countries, electronic payments are already shifting consumer behaviour. Merchants should already enhance their setup by advancing payment solutions using blockchain. Doing so will surely have a positive impact at the individual level in any country or region.

As a universal instrument enabling global transactions, blockchain payments can impact the entire retail industry by strengthening how money is transferred from the consumer to the store as well as between merchants and suppliers. Ultimately, solutions that allow retailers to both receive electronic payments from consumers and pay their immediate suppliers digitally will advance the payment infrastructure at all levels.

Today’s consumers want goods and services to be available at the click of a button, something that is also raising the bar for the checkout stage. As enablers providing and using several transaction solutions domestically and across borders, retailers have the power to facilitate all electronic payments by consumers with fintech. In sum, this can mean a significant use of cashless payments and less use of cash and checks long-term in developing countries.

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