# Three ways blockchain is transforming payments
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-03-04
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: Building Customer Trust with Blockchain: The Role of
Meta Description: Discover how blockchain technology is changing the payments landscape, tackling counterfeiting with NFTs, and gaining customer trust through transparency and
URL: https://financedigest.com/three-ways-blockchain-is-transforming-paymentshtml

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_By_ **_Stefano Bettinelli,_** _Head of Innovation,_ [_MultiPay Group_](https://www.multipayglobalsolutions.com/)

_“Caring is good, authentic is better, but dependable is best”_

_–_ _Carlos Guerrero, Senior Director, Advisory,_ [_Gartner_](https://www.gartner.com/en/marketing/insights/articles/brand-strategies-focused-dependability-score-highest)

When it comes to building customer trust, [Gartner](https://www.gartner.com/en/marketing/insights/articles/brand-strategies-focused-dependability-score-highest) research reveals three key potential drivers; warmth, authenticity and dependability. Of these, the most important factor is dependability. In fact, Guerrero describes dependability as the untapped opportunity for most organisations.

From my point-of-view, this is where blockchain steps in. The very nature of the technology lends itself to trust by [providing the opportunity to build secure platforms](https://www.financedigest.com/fico-provides-decisioning-platform-for-smartphone-only-buddybank-in-italy.html "FICO Provides Decisioning Platform for Smartphone-Only buddybank in Italy") for traceable and reliable transactions. For most brands, and especially retailers, it’s a revolution for the [way they handle arguably the most important aspect of the customer](https://www.financedigest.com/customer-engagement-whos-leading-the-way.html "Customer engagement – who’s leading the way?") experience – payments.

Cryptocurrencies based on [blockchain technology](https://www.financedigest.com/venom-foundation-and-hub71-partner-to-accelerate-growth-and-adoption-of-blockchain-technologies-from-abu-dhabi.html "Venom Foundation and Hub71 Partner to Accelerate Growth and Adoption of Blockchain Technologies from Abu Dhabi") are essentially universal currencies and, in theory, can be in any country or sector you trade in. There’s [growing consumer](https://www.financedigest.com/phosphate-conversion-coatings-market-to-surpass-us-2-35-bn-as-applications-in-consumer-electronic-grows-fmi.html "Phosphate Conversion Coatings Market to Surpass US$ 2.35 Bn as Applications in Consumer Electronic Grows: FMI") appetite as well. Research by Visa indicates that just over half of consumers have a strong interest in crypto-linked cards that link to digital currency balances and allow them to pay through such methods. This opens significant [opportunities and choice for retailers](https://www.financedigest.com/uk-retail-banks-is-irrelevance-curtailing-opportunity.html "UK Retail Banks: Is Irrelevance Curtailing Opportunity?") and merchants to embrace consumers wanting to make use of alternative payments.

So, what are some of the [ways blockchain is changing](https://www.financedigest.com/10-ways-automation-has-changed-the-role-of-the-cfo.html "10 ways automation has changed the role of the CFO") the payments landscape? And how can [businesses use blockchain to gain customer trust](https://www.financedigest.com/trusting-your-gut-how-to-harness-the-power-of-your-business-instincts.html "Trusting your gut: how to harness the power of your business instincts") and be seen as more dependable?

**_Using NFTs to tackle counterfeiting_**

Firstly, let’s visit a topic getting increasing visibility in the headlines, non-fungible tokens – or as they are more commonly known, NFTs. When it comes to building brand trust and dependability, NFTs have a critical role to play in tackling the estimated trillion-dollar counterfeiting industry.

For instance, [Luxochain](https://www.luxochain.io/) provides a pioneering integrated payment and blockchain solution for verifying the authenticity of products in the luxury, retail, and pharmaceutical industries.

Blockchain offers a [unique opportunity for brands](https://www.financedigest.com/the-rise-of-finfluencers-presents-unique-opportunities-but-brands-must-proceed-with-caution.html "The rise of “Finfluencers” presents unique opportunities but brands must proceed with caution") to re-take control by connecting electronic tags inserted into a product at the point of manufacture with an NFT. By doing this, every product a brand [sells has a unique digital](https://www.financedigest.com/digitally-projected-revenue-to-be-the-unique-selling-point-of-pharmaceutical-excipients-for-taste-masking-market.html "Digitally projected revenue to be the unique selling point of Pharmaceutical Excipients For Taste Masking Market") fingerprint on the Luxochain blockchain. Once the product is purchased, this NFT is then transferred to the customer and [stored in their Luxochain app](https://www.financedigest.com/apple-given-fourth-dutch-fine-in-app-store-dispute.html "Apple given fourth Dutch fine in App Store dispute"). At a later stage, the NFT can easily be passed on if the customer decides to resell the [product to ensure a verifiable chain of ownership back](https://www.financedigest.com/5-ways-to-sustain-productivity-when-the-clocks-go-back.html "5 ways to sustain productivity when the clocks go back") to the original manufacturer.

With research by [Incopro](https://www.incoproip.com/how-counterfeit-goods-destroy-brand-reputation/) indicating 66% of consumers who unintentionally buy counterfeit goods lose trust in buying from that brand again, the use of NFTs is one way to significantly increase confidence in the authenticity of the products being bought.

**_Pioneering the future of donations_**

The secure, transparent nature of blockchain also lends itself perfectly to the charitable sector. Forward-thinking charities such as [The Water Project](https://thewaterproject.org/donate-bitcoin) and [The Rainforest Foundation](https://rainforestfoundation.org/donate/cryptocurrency/) readily accept digital currency donations to ensure they are open to as many fundraising options as possible. It’s certainly catching-on too, with over $2.4m worth of cryptocurrency donated to charities by the [Giving Block platform](https://thegivingblock.com/resources/crypto-philanthropy-key-data-and-statistics-2021/) on ‘Crypto Giving Tuesday’ in 2021.

For charities, the bonus is that they can accept [payments and boost](https://www.financedigest.com/how-the-epa-plans-to-boost-confidence-in-the-uk-payments-industry-post-brexit.html "How the EPA plans to boost confidence in the UK payments industry post Brexit") income securely, transparently, and globally without paying restrictive exchange and transaction fees. For the donor, it [builds trust](https://www.financedigest.com/how-financial-services-can-secure-data-and-build-trust-in-todays-modern-environment.html "How financial services can secure data and build trust in today’s modern environment") in the charity by providing a clear trail that their gift through blockchain is going towards its intended purpose.

[**_Reducing the friction of cross-border payments_**](https://www.financedigest.com/how-can-you-reduce-the-risk-of-fraud-in-b2b-payments.html "How can you reduce the risk of fraud in B2B payments?")

Often associated with high transaction fees and delays, another critical use of [blockchain is for cross-border payments](https://www.financedigest.com/why-blockchain-could-represent-the-future-of-cross-border-payments.html "Why blockchain could represent the future of cross-border payments") – crucial for growing international brands. Currently, it’s no secret that the sending of money between territories can be a tedious and complicated process. Blockchain can immediately remedy this by connecting disparate [international financial](https://www.financedigest.com/the-hidden-financial-woes-of-international-students-heading-for-the-uk.html "The Hidden Financial Woes of International Students Heading for the UK") institutions, sellers, and consumers. Cryptocurrencies enable faster transactions between these parties more efficiently and with either very low or zero transaction fees.

In addition, the [rise of stable coins enables users to benefit from the transparency and security](https://www.financedigest.com/russian-threat-to-baltic-security-rising-estonian-intelligence-report.html "Russian threat to Baltic security rising – Estonian intelligence report") blockchain offers especially in a cross-border scenario, where traditional transfers often necessitate multiple intermediaries, high fees, and may be vulnerable to security breaches. Stable coins are cryptocurrencies whose price is pegged to a specific fiat money, such as [dollar or euro](https://www.financedigest.com/dollar-slips-yuan-gains-on-china-pmi-hot-inflation-lifts-euro.html "Dollar slips, yuan gains on China PMI; hot inflation lifts euro"), and can be easily transferred via the blockchain. With a 1:1 pair with the underlying fiat currency, these assets have extremely low volatility compared to other cryptocurrencies.

**_Looking ahead_**

[Payment technology is in an almost constant state of innovation as brands look to improve the customer](https://www.financedigest.com/2019-year-customers-take-control-payments.html "2019: The year customers take control of payments") experience, enhance reputation, enter new markets, and make significant cost-savings. Blockchain is truly revolutionary in all these key areas. However, whilst we are close to wider adoption, it’s important to remember that traditional methods of [payment will continue to dominate the landscape for at least the immediate future](https://www.financedigest.com/the-future-of-biometrics-in-payments.html "The Future of Biometrics in Payments"). There are still many obstacles that need to be overcome – from the environmental [impact of blockchain technology to the easing](https://www.financedigest.com/german-gas-commission-agrees-proposals-to-ease-impact-of-soaring-prices.html "German gas commission agrees proposals to ease impact of soaring prices") of regulations and compliance. In the meantime, continued innovation in the space will mean blockchain continues to prove itself in helping retailers and other merchants [build great customer relationships](https://www.financedigest.com/can-i-please-speak-to-someone-why-building-relationships-is-still-crucial-in-digital-payments.html "“Can I please speak to someone?” Why building relationships is still crucial in digital payments") and future-proof their brands by becoming more dependable.


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