The adoption of blockchain across large organizations is gaining steam, and so are enterprise blockchain solutions. Although BTC and other cryptocurrencies are better known in public, other blockchain solution providers are also gaining strength, and their applications are becoming regularly adopted depending on the vertical they serve.
For many large enterprises IBM blockchain platform, especially Hyperledger Fabric, is the obvious choice. Unlike other operators, the regular onslaught of the financial crisis, especially in the banking sector, has meant a few tricky years for many banks. The permissioned Hyperledger Fabric means only those stakeholders within business are allowed, and the blockchain is not open to the public.
But, the challenges of more regulations, new competition from emerging sectors like DeFi, and advanced technologies are pushing banks to innovate in how they do business. Everyone from legacy financial institutions to a newer named banks innovation and openness is the only ticket.
The same is valid for insurance companies increasingly searching for ways to grapple with the same goal: customer loyalty. While the others in financial services have held onto their legacy methods increasingly, their customers have moved to simpler subscription-based models that require a fundamentally different approach.
As the cryptocurrency world has pushed traditional financial institutions with alternatives like Decentralized Finance (DeFi) and tokenization of assets through Security Token Offering, financial institutions have supercharged their innovation with concepts like Visa Tokenization by payment processors.
One of the areas that have grown exponentially is digital payments which have seen a massive rise in popularity. Added to this is the impact of the Covid-19 pandemic. COVID-19 is responsible for an even more considerable digital shift within societies across the globe. The current global pandemic has radically changed the way we live, work, communicate, and, not least, shop. During the pandemic, the demand for digital payments pushes people to use digital payments more often to obtain the goods and services they need the most. This, in turn, is also causing an uptick in online fraud.
According to a recent study by Juniper Research, titled “Online payment fraud: emerging threats, segment analysis & market forecasts 2020-2024″, has predicted that businesses in sectors like eCommerce, ticketing, funds transfer, and online banking services may lose as much as $200 billion due to online payment fraud in the next four years, between 2020 and 2024 if no measures are taken.”
With innovation in tokenization, credit card processing services such as Visa have tokenized its branded payment cards. Starting in 2014, the credit card processor launched its Visa Token Service. Since that time, Visa has registered more than 150 global token requestors. These include major industry sectors like mobile and wearables manufacturers, issuer wallets, online merchants, and retailers. The skyrocketing adoptions mean Visa will have its own branded network with retailers that process their branded payment cards.
The Visa Token Service (VTS), which was introduced in 2014, is a novel security technology that replaces sensitive account information, the ill-fated CC number, with a unique digital identifier called a token. This enables payment processing without exposing the account details. The VTS has proven very effective in minimizing digital fraud globally, resulting in eCommerce transactions that are more secure for different types of digital transactions. The VTS is responsible for reducing online fraud by a whopping 26% compared to traditional online card transactions.
Visa Inc. recently announced that its VTS token merchants had processed combined eCommerce payments totaling about $1 trillion. This is a significant milestone given the Juniper research prediction of online payment fraud reading $200 billion in its efforts to make digital payments more secure and trouble-free.
To further enhance its security, the Visa Token Service is offering this service to new participants who can act as credential-on-file (COF) token requesters to help make digital payments more secure. As of May 2020, Visa had announced the addition of 28 new partners, including Aurus, PayVision, Yandex.Money, and many others.
In conclusion, the recent efforts by large enterprise solutions providers to include blockchain in their technology stack to provide more secure, streamlined, and innovative solutions are bearing fruit resulting in finding new ways to address problems that have long plagued certain sectors.