Blockchain Gains Value, Importance as Digital Payments Become Growing Trend

The COVID-19 pandemic rattled every market imaginable worldwide, with some changes becoming permanent as they simply accelerated existing trends. The digital payments market certainly benefited as online transactions skyrocketed with some brick-and-mortar stores even refusing to take cash because of the threat of spreading germs. But don’t confuse a truly cashless society — where cash and coins physically do not exist — with one where money is still around, just not used frequently. The world was already moving towards the latter, and the coronavirus sped up the process, which shines a spotlight on the opportunities in digital payments. Companies big and small are making the most of technology that serves as the backbone of the next generation of payment systems, such as GreenBox POS (NASDAQ: GBOX) (Profile), a provider of customized blockchain payment solutions that is leveraging acquisitions to grow its international footprint. Others enjoying rapid growth in the exploding market of financial technology, or fintech, including significant developments from the likes of ACI Worldwide Inc. (NASDAQ: ACIW), NCR Corporation (NYSE: NCR), Paysafe Limited (NYSE: PSFE) and Intuit Inc. (NASDAQ: INTU) to shepherd the industry along.

• Some 29% of Americans go an entire week without make a single cash purchase.
• Since last summer, GreenBox has executed an M&A strategy to expand internationally, agreeing to acquire UK’s Roark Holdings and Bulgaria’s Transact Europe.
• Preliminary results from FY 2021 show GreenBox transaction volume reaching $1.95 billion, up more than 800% from 2020.
• In January, GreenBox expanded its portfolio to begin offering ACH services to an influx of demand as clients commit immediately to more than $50 million in monthly processing.

Blockchain Shines as People Turn to Plastic

Whether one is a proponent or opponent of the notion of a cashless society, there is no denying the fact the people are not pulling dollar bills out of their pockets to pay for goods and services like they used to. Pew Research in 2018 showed that 29% of Americans go an entire week without making a single cash purchase. Data from Square showed that cash purchases transacted by its sellers decreased from 37% of sales in February 2020 to 33% in April 2020, a signal that the pandemic was having a meaningful impact. In its Resilience, Replacement and Renewal report, global consultancy A.T. Kearney identified going cashless as a top global trend while noting Riksbank data showing cash payments were used in just 15% of retail transactions in Sweden in 2016, down from 40% in 2010.

Within the fintech world, blockchain has become a leading subject for its ability to inexpensively facilitate extremely fast and highly secure digital transactions. The digital record-keeping technology that underscores Bitcoin, blockchain is becoming ubiquitous in countless industries and recognized as a bona fide threat to conventional banks because its structure doesn’t require a middleman to complete transactions. There is plenty at stake according to Mordor Intelligence, which puts a transaction value of the global digital payments market at $5.44 trillion in 2020 with expectations for 11.21% compound annual growth to reach $11.29 trillion by 2026.

And that’s not all. An estimate 21% of the world (~1.7 billion people) are unbanked. Blockchain could provide an affordable solution that is superior to today’s modality used to transfer about $500 billion across borders annually through personal remittances.