Blockchain payment systems are used to facilitate, process, and verify transactions made on a blockchain or distributed ledger system. These tools may be designed for individuals, businesses, or financial institutions, and will have a few differing features depending on the use case. Across all uses, blockchain payment solutions allow customers to quickly and securely make transactions on a blockchain.
Companies choose to use blockchain payment solutions for a number of reasons. Some tools enable the creation of smart contracts, or protocols used to facilitate, verify, and enforce transactions. These contracts are well documented and provide a higher level of traceability. These forms of payment are also quicker than traditional tools since they do not require a financial institution and transactions can be completed across country borders with ease.
Some of the less complex and customizable blockchain payment products offer a product similar to payment gateways. The only difference here is the documentation and traceability provided by the blockchain and the simplified international payment process. These tools can also get confused with cryptocurrency exchanges, but those tools are not used for trading anything except cryptocurrencies such as bitcoin or ethereum.
To qualify for inclusion in the Blockchain Payments systems category, a product must:
- Be built upon on a blockchain-based platform or distributed ledger technology (DLT) system
- Process and authenticate transactions on a blockchain
- Facilitate transactions without a financial institution, bank, or other third-party verification service
