Trust is the most valuable resource in the financial industry today. Only transparency and traceability of processes, including payment processes, can help companies survive a difficult time.
Transparent payment systems not only make things easier for banks, they also boost the economy. The faster a payment is processed, the faster the money keeps flowing.
In these times of recession, austerity and de-influencing, when companies' reputations can be ruined in a matter of days, it's important for businesses to stay honest. Tokenization
of payments, supply chains, investments, and implementation AI, Big Data, and blockchain into business processes are necessary ingredients for an informed company that wants to stay in the future.
Blockchain was one step in the evolution of payment processing. First, cards used ISO 8583 messaging technology, then came real-time payments thanks to ISO 20022. Now Mastercard and other major financial companies are embracing transaction tokenization.
This means that the payer does not have to give his bank card data to the store. He exchanges them once for a special digital token and uses only this token when making the payment, without the risk of the card data being intercepted. The advantage is that the token works only in conjunction with a unique cryptogram generated by the payer; it is impossible to recreate this cryptogram. Also, these tokens are easy to manage – deleting or creating new tokens is a matter of a minute, no trips to the bank or other bureaucratic issues.
Michael Meeback, CEO of Mastercard, told analysts and shareholders
that his company has passed the milestone of 2 billion tokenized transactions per month, a 38% increase over the year before and that Mastercard is launching digital payments in 110 countries and is going to tokenize a range of assets that can be tracked in the blockchain.
Payment processing rates range
from 1.15% + $0.05 to 3.15% + $0.10 in interchange fees plus an additional 0.14% to 0.17% in assessment fees, plus costs per month. Currency conversion, KYC/AML, and international bank intermediaries add up to 6-10% to the cost of remittances. International payments cost 1 to 3% for travelers and an additional 1-3% for merchants, and that's on top of other card processing fees. Rejected payments are also expensive. International payments risk simply getting lost or stuck at one of the counterparty banks during the transfer process.
Blockchain tokenization significantly reduces all of these costs and prevents losses as well as the likelihood that a transaction will be rejected.
Tokenization has already made its way into e-commerce, on the payment side. The new stage of development is the integration of blockchain into supply chains and other business processes. Thus, technologically generated transparency
will become the new market standard.