These days, no one is keeping currency bills in their wallets. Instead, it will be filled lot of credit cards, debit cards, and membership cards. Because credit cards help you to shop anything you need within few minutes irrespective of where you are making the purchase (online/offline). How? Let us see how it works.
Offline – Let’s assume you want to buy some new clothing for you. What will you do? Simply go to a clothing store, put all the clothes in the shopping cart. Then go to the billing counter, swipe the card, get the receipt for your purchase and walk away with the shopping bag.
Online - Alternatively, if you do the shopping online, you need to enter the details of the card like card number, expiry date, and CVV. You will receive a confirmation message within few minutes either on your mobile phone or your email. The items purchased will be delivered to your doorstep as per the delivery schedule of the retailer.
Have you ever thought how the credit processing works in both the above scenarios? For processing the transaction successfully, it involves many participants like the ones given below:
- Issuing bank (Bank which issues the credit card)
- Acquiring bank (Merchant’s Bank which receives the payment)
- Payment gateway
- Credit card network
In general, any credit card transaction will follow all the steps given below.
- The customer submits his/her card information.
- The payment gateway passes the information in a secure manner to the credit card network (Visa/MasterCard).
- The credit card network forwards that information to the issuing bank which approves or declines the transaction based on the available balance of the customer’s account.
- Based on the result of the above step, either confirmation success or failure is shown on the screen.
- If the transaction is completed successfully, then the merchant starts the delivery process, and the issuing bank sends the appropriate funds to the merchant’s bank within few business days.
It seems that the above process is very simple and straightforward. Great! What is the main drawback in this process? As this process involves too many middlemen, the transaction fees range from 3% to 15% which adds up to the total cost for merchants as well as consumers.
What is the alternative for credit card payments? Even though cryptocurrencies can be considered as an excellent alternative for credit cards, currently there is no billing platform for the crypto payments. To make the crypto billing accessible to every business, the company Decentralized Vision is developing a free blockchain pull payment protocol named PumaPay. It offers a flexible billing solution with a variety of payment options suitable for any kind of business.
The main objective of the PumaPay protocol is to provide an innovative payment system based on the cryptocurrency by combining the best practices of the existing payment platforms to increase the usage of cryptocurrency in both online and offline payments. Sounds interesting? Check out https://pumapay.io/ to learn more information about the PumaPay protocol.
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Photo Credit: Jonas Leupe