More than a decade back, after a few influential techie types discovered “Bitcoin: A Peer to Peer Electronic Cash System”, a new form of payment vehicle rushed to the point-of-sale to revolutionize the stodgy payments industry forever. Such would not be the case due to the volatility of this digital asset, but it did become an investment instrument that has created wealth in every corner of the planet. In its wake, its use in the retail market has waned, but the advent of stablecoins and systems like Facebook’s s Libra have caused retailers and technologists to re-examine how blockchain ideas could flourish.
Observers often find it amusing to wonder if Bitcoin’s creator, i.e., Satoshi Nakamoto, if he truly does exist, ever thought that his brainchild, a decentralized ledger system, would ever remotely find any uses outside of the financial services arena. Remarkably, efforts across the globe in every imaginable business vertical are in the news daily, espousing the benefits of blockchain technology, as if nothing else has ever mattered. Billions are being invested annually. Estimates are that decentralized databases might save their owners some $550 billion a year, and the World Economic Forum has projected that “10% of global GDP will be stored on the blockchain by 2025”.
But what about retail? There are a number of blockchain projects in process across the globe in Asia and other markets, but it appears that this industry may still be in the planning stage or at least waiting to take advantage of advancements in tangential industries, where distribution, supply chain, and provenance verification systems are still under development.
There is also a problem of available talent. There is a bidding war at present to attract the brightest and the finest blockchain software engineers. Banks and large fintech companies are throwing the big bucks around to corral the best talent, another reason why it might take a bit longer in retail. Of course, once Libra or something like it makes a big splash, stablecoins could be the next pervasive digital cash instrument at the POS.
What are some of the primary ideas under development or in their early planning stages? Here are a few bits and pieces:
- Provenance or the earliest known history of something’s origin will become more important as consumers care more about where a product originated. Transparency in this area is what the blockchain is known for;
- Resolving disputes could be more decentralized, where resolutions are resolved on a more local basis, based on community input;
- Loyalty programs and validation of rewards across brand types could easily be maintained on a decentralized ledger, while also providing an audit trail, unique to each customer, a good mechanism for eliminating fraud, as well;
- Marketers will be able to review a targeted customer’s buying history and pinpoint promotional ads accordingly.
As a result, The Daily Hodl concludes that crypto-based payments may one day become ubiquitous, since one billion of the world’s un-banked could have a smartphone crypto-wallet:
If the prophecy that electronic money will promote widespread financial inclusion is fulfilled, unbanked consumers could bring $600 billion more to the global economy every year. Retailers would arguably be the top beneficiaries of more mobile and crypto-based remittances.