Blockchain is becoming more and more common in business and there is a reason: it is cheap, fast, smart, and transparent. It is about time, this technology can potentially impact all sectors of the economy and other commercial spheres: healthcare, real estate, logistics, etc. The most visible and known example of blockchain is bitcoin where companies like ZIM, Maersk, and most importantly Google and Sachs have embraced blockchain for their complex operations.
Blockchain is a distributed ledger technology (DLT) that automatically records and verifies transactions without the involvement of any third party. Though it aims to change all the sectors, it has its highest impact on the eCommerce industry.
Over the last few years, the eCommerce industry has experienced the highest growth. According to the latest statistics from eMarket, the global e-sales reached $3.5 trillion in 2019 and projected to reach more than $25 trillion by the year 2022. Despite tremendous growth in eCommerce, the industry still faces various challenges because of its dependence on the financial institution and centric nature of the eCommerce platforms.
A large share of these challenges is due to a number of inefficiencies and out-dated practices in the industry. However, Bitcoin has an answer to address these challenges. The ability of this technology to track, improve security, execute contracts, transfer, and secure data has to make eCommerce experts believe that the blockchain revolution is inevitable.
Let’s take a look at how blockchain development technology can help to overcome eCommerce challenges and bring revolutionary changes.
Five Ways Blockchain Will Transform E-commerce Industry in Future
One of the biggest problems that pose a threat to the eCommerce industry is data storage and security. eCommerce business is the data hub as it tracks and analyzes customers’ details to stay competitive. In such a scenario, data security has become a major issue as the data is stored on central serves which is vulnerable to criminals.
Some eCommerce businesses have also suffered huge losses due to cyber-attacks. However, blockchain-based eCommerce platforms will make businesses resistant to cyber-attacks.
As blockchain platforms are decentralized, it will make all the data and information decentralized. With blockchain, customers will have the choice to either sell their data to other parties or not! If users don’t compromise on sharing their data, it will be virtually impossible for hackers to get access to data on the blockchain platform.
eCommerce Contract Execution
Another benefit of blockchain for the global eCommerce market is smart contracts. A smart contract is a program that controls the transfer of digital assets and automation of commercial processes in logistics. It allows users to execute contract conditions automatically and quickly without relying on other parties.
Moreover, smart contracts can enhance the reliability and security of the eCommerce market. For instance, when a customer visits a website and places an order, the money paid for the service or the product would be held in smart contracts. The seller, on the other hand, will be bound to the contract and redirect it to the delivery company. This way, companies can keep track of all the sales made.
Prevention of Fraud
There were almost 1.4 million credit card fraud cases in the year 2019 causing a loss of $1.48 billion around the world. Most of these cases have been reported by small retailers against large eCommerce stores. The industry has taken a wide range of precautionary measures against fraud and theft, the issue continues to grow. This is due to the fact that 80% of online businesses rely on traditional security systems.
So how can blockchain-based payments systems ensure a fraud-free eCommerce business? Blockchain platforms facilitate online transactions between sellers and buyers in a very transparent and effortless manner. These blockchain solutions also provide resistance against chargeback frauds (which count for the 48% of the total eCommerce frauds). Various large eCommerce stores such as eBay, Alibaba, and Amazon have already adopted the blockchain platforms to minimize online frauds.
Supply Chain Management
Supply chain management issues are something that every eCommerce seller is familiar with. Current supply chain system issues in the eCommerce industry can only be solved by blockchain technology. Blockchain platforms like VeChain can create a strong visualization of the supply chain processes.
A supply chain focused network is what the eCommerce industry needs today to solve supply chain management problems. It will serve as a transparent network where customers can easily track the product they buy. Whatever, they buy online, they will know everything about that product: what raw materials are involved, the production plant where it was manufactured, packaging. Thus blockchain-based supply management platforms will benefit eCommerce by increasing customers’ confidence and trust in online shopping.
Transactions & Payments
The transaction is perhaps the most important aspect of the eCommerce industry. Delayed payments and intermediary issues can largely cost a business. Despite having payment solutions like Paypal, Venmo, Skrill, etc. the e-commerce payment industry still needs improvements. These options don’t have a reliable and extensive cross-border payment system and also have high exchange rates. These payments options have high substantial fees often as high as 10 percent.
On the other hand, blockchain is the way to eliminate banks and exchange fees while making cross-border payments. Making transactions through blockchain also ensures fast and secure payments directly between two parties, thus saving money for both sides. It will create ease for the eCommerce industry by providing highly securable transactions, and overall unforgettable customer experience.
By using these platforms, eCommerce stores can pay their supplier instantly, thus taking eCommerce to the next level.
With the blockchain as the leading technology, the eCommerce market is on the verge of revolution. The chances are that blockchain is the much-needed technology that will finally replace the outdated and ineffective eCommerce practices and make it more efficient and transparent.
A transformed eCommerce industry will soon skyrocket B2B and B2C as blockchain continues to roll out. While this technology may take some time to bring big changes, businesses need to be fully prepared to embrace this new technology.
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