What does Blockchain really mean for the payments industry?

“Providing the consumer with a truly frictionless experience is the holy grail for the payments industry. This has already been achieved in-app with platforms such as Uber, but has yet to be translated in-store”

Internet of Things (IoT) and Blockchain have become a familiar tune, looming on the horizon for middlemen and intermediaries of every industry but none more than the payments industry. As of yet nobody has managed to go to market with a solution to eliminate the need for these archaic practices of using regular fiat tokens.

Or have they?

There is an overabundance of issues surrounding the current centralised payments system with a small scattering of companies dominating the industry. With hundreds of millions of transactions processed every day, VISA accounts for up to 150 million transactions everyday — that’s around 1,667 every second or 54.7 billion a year — but it is MasterCard who lead the way with 74 billion transactions per year.

There are only a handful of Payment Gateways offering these payments and the fee’s are crippling for merchants. The decline in cash transactions has been significantly amplified by the rise in smart device ownership with more companies offering ‘mobile payments’ and vendors are left to bear the brunt of the fee’s.

Even with the recent surge of startups entering the ring, these problems persist. Smart device ownership has expanded to 4.5 billion users worldwide and is forecasted to grow even higher in the near future with further technological inclusion. This trend has brought a significant level of convenience that vendors are integrating into their transaction process. Companies such as Samsung and Apple have introduced payment methods onto phones and wearables for consumers while vendors are utilising tablets as point of sale systems. These inventions, while innovative in design, are tied to middlemen services with added fees.

The pitfalls of the current payments industry become more pronounced when you examine the chargeback fee structure (A chargeback occurs when a customer has a dispute with a merchant, due to fraud or unauthorised use of their card, and the funds get reversed from the merchants bank). Chargebacks can severely punish merchants for any human error with most service providers charging $15-$20 per chargeback incurred in addition to the cost of the goods or services.

Bad Design = Bad Money

The idea of a chargeback may seem like a rare occurrence — I mean, how often does a consumer chargeback without good reason to scam a merchant when their personal details are registered with their bank?

Actually, the reason for chargebacks are due to poor design. Credit and debit cards store the private key on the front face of a card and the Card Verification Value (CVV) on the back. Once a predator physically has your card or has acquired your key from an e-commerce purchase or has breached the data storage layer of any bank or merchant, they have access to your funds. You don’t even have control how your data is stored.

An Ignorant Fool or an Evil Genius?

It begs the question, is the poor design of cards and centralised banks a mistake out of ignorance or is it designed to keep you dependent and enslaved to the current centralised paradigm?

Good Money Replaces Bad Money

According to Moore’s Law, good money replaces bad money. Festy is the juxtaposition of convenience and good cryptographic design in payments and remedy to cryptocurrency adoption.

Why Festy?

Festy is a contactless payment and verification system that unites IoT and blockchain to benefit event organisers, merchants and consumers worldwide. With the Festy Token consumers take back control over their transaction data and can sell their data, thus controlling who has access at any time. This gives merchants and marketing companies a transparent way to trust and access genuine consumer data insights, revolutionising the advertising industry.

Festy allows merchants to accept a variety of currencies and get paid in a local currency of their choice, removing foreign exchange costs for travelers. Merchants accepting Festy will set their own terms over chargebacks and there are potentially enormous savings to be made compared to the crippling fees from existing payment solutions making Festy a truly disruptive payments system. Users top-up their Festy “wallet” with cash, card or crypto using the Festy Pay app. Consumers and merchants can withdraw to their crypto wallet or bank at any time.

The payments industry is ripe for disruption and with features like the above it seems Festy could be the alternative people have been waiting for. Better security design with added Two-Factor Authentification should be standard procedure with all payments. Educating mainstream consumers in adopting secure payments is the desired outcome.

With bitcoin you are your own bank; with cold storage you are your own vault; and with Festy you are your own payments system, ticketing, ID verification and loyalty all in one.

Sign up the the whitelist for participating in the FESTY token sale by visiting www.festy.ie and join the Festy revolution!

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