NetworkNewsWire Editorial Coverage: Change is coming in the financial sector. The desire for faster payments and better audit trails is leading companies away from traditional payment systems and toward innovation. Blockchain technology is increasingly relevant in this area, with companies such as Global Payout, Inc. (GOHE) (GOHE Profile) applying the technology to improve payment processing and logistics in the financial sector. Mastercard (MA), one of the biggest players in payment processing, has obtained patents to develop its own blockchain systems. Glance Technologies (GLNNF) (GET:CNX), which specializes in payment solutions for customers, has partnered with Netcoins Inc. to integrate blockchain-based cryptocurrency payments into its systems. Import/export payments can now be processed through blockchain smart contracts, thanks to LongFin (LFIN). Unsurprisingly, given all these developments, direct banking and payments company Discover Financial Services (DFS) has identified blockchain as one of the most important technologies for the future of payment.
Why Blockchain?
Blockchain technology is shaking up the financial sector in big ways. Its decentralized ledger system is the power behind cryptocurrencies such as bitcoin, which continue to rise in value despite setbacks early this year. Analysts at the World Economic Forum predict that 10% of GDP will be stored using blockchain by 2025. But this isn’t based just on the rise of cryptocurrencies. It comes from the far wider applications of blockchain for financial processes.
Blockchain is a distributed ledger, a system of record keeping without a central controller, in which older parts of the record cannot be deleted or amended. This allows records to be kept across a network of users without the need for a central controller, who could provide a single point of failure and vulnerability to fraud. The lack of central processing improves efficiency. Financial transactions can be carried out directly between people in the network, removing third parties and delays. It’s a processing system that can be applied not just to cryptocurrencies but to interactions in other currencies. As a result, major banks and technology companies are getting in on developing blockchain financial technology.
Making Payment Easier
Founded in 2009, Global Payout (GOHE) has quickly become a noticeable contender in blockchain technology solutions for payments. The company’s Consolidated Payment Gateway (CPG) offers payment options including mobile accounts, direct bank payment, and prepaid card accounts, creating customized, comprehensive solutions for businesses. Customers use CPG as a central hub for international payment networks, distributing money to members and employees around the world.
This was followed in 2017 by the Global Reserve Platform (GRP), Global Payout’s second major platform for managing financial logistics. GRP again provides businesses with a customizable platform for managing financial transactions. Built around the Global Reserve Administration module, it provides a complete payment solution, connecting back end processing directly to the front-end payment options for individual users.
Like CPG before it, GRP offers a wide range of payment options. Mobile wallets, prepaid credit cards and prepaid debit cards are among the options supported by GRP, as it integrates payment systems with users’ existing mobile technology for ease of use. The platform can manage all manner of financial interactions, including market orders, grants, loans, and cross-border payments. All of this is done smoothly and securely through a system customized to the needs of an individual corporate client.
Payment Solutions for Difficult Circumstances
While Global Payout has provided innovative products for its core corporate market, it has also been expanding into other areas of financial technology. Some of its most exciting work caters to a fast-growing market that has been badly under-served by the traditional financial sector, and which as a result is becoming an incubator for broader financial technology solutions. This is the legal cannabis sector.
The market for legal cannabis is growing fast. Medical marijuana is becoming more widespread, while recreational use has become legal in California, with Canada soon to follow. As legalization spreads, the number of legal cannabis suppliers and companies supporting them is set to grow rapidly. They will need financial systems, and MoneyTrac, a Global Payout subsidiary, is one of the first to offer solutions for this lucrative market.
Cannabis companies often cannot access traditional financial systems, due to legal complications around the sector. MoneyTrac has stepped in to fill the gap. Its customizable platform provides a full payment solution, allowing cannabis sellers to escape the risks and uncertainties of a cash-based business model.
MoneyTrac’s payment solution provides a more secure option for processing payments that would otherwise be cash based. The company also provides consulting services for its customers, including branding, marketing, and business advice. This helps to ensure that its payment system is deployed in an effective way.
Partnering for Great Profit
Global Payout is further leveraging its position within the financial technology sector through collaboration with other companies. It has recently announced a partnership between MoneyTrac and GreenBox POS (http://nnw.fm/dA6He). GreenBox’s integrated suite of payment products creates an end-to-end system that covers areas such as tax payments, audit preparation, and tracking expenses.
Vanessa Luna, CEO of MoneyTrac, said: “The details, intricacies, and overall effectiveness of the technology that GreenBox POS has developed is unrivaled by anything else we have seen thus far and is something we believe will disrupt the financial technology side of it. Not only are their technology solutions impressive, but they fall right in-line with MoneyTrac’s core objective and mission of “Banking the unbankable.” In becoming a lead sales and marketing partner for GreenBox, we are giving MoneyTrac another extremely effective resource, leveraged to deliver the solutions our customers and partners desperately need to help run their businesses with optimum efficiency.”
Another partner is Integrated Compliance Solutions, with which MoneyTrac is collaborating to help customers comply with government regulations through the application of technology (http://nnw.fm/pzm3M). With its work sitting at the intersection of the heavily regulated cannabis and financial sectors, MoneyTrac is in a unique position to provide early solutions to a tangle of challenges for customers, and so to become the leader in its field.
Innovative Solutions for an Ever-Changing Market
It’s a move that’s characteristic of Global Payout’s approach. The company is bringing blockchain-based technology to bear to bring change in the rapidly evolving field of payment processing. Its ground-breaking technologies make use of blockchain to bring benefits to customers, without being vulnerable to the dramatic swings in blockchain’s current core area of cryptocurrencies.
Other applications include the work of subsidiary SecurCapital, which is providing financial software for the mid-tier logistics industry. Its integrated system allows quick, secure payments to be made around the world. Companies are thus able to build up momentum, as they don’t face delays in payment processing. Invoices, proof of delivery, and payments are all dealt with, cutting much of the work out of payment processing.
Working in payment areas such as the cannabis market is pushing Global Payout to develop unique, secure, and speedy payment systems that can withstand strict regulatory scrutiny. It’s the sort of technology that’s valuable across the board for payment processing and highlights the potential of blockchain in this area.
Other companies are looking at similar approaches. Mastercard (MA) makes much of its forward-looking approach to finance, listing “Putting technology first” among its key concerns. Like many banks, it has shown an aversion to cryptocurrencies, but is now taking an interest in other uses of blockchain. It filed a patent in November for a blockchain database to be used in speeding up payments.
Glance Technologies (GLNNF) (GET:CNX) is working on integrating blockchain-based cryptocurrency payments into everyday life. While cryptocurrency’s development has largely been driven by investors and currency miners, Glance has focused on the customer side of the equation, creating a payment system for everyday use. By providing security and convenience in payments, it’s pushing to integrate blockchain and cryptocurrency into day-to-day commerce. Work like this will help to push blockchain past early adopters and into the broader world of payment and finance.
At the higher end of the financial scale, LongFin (LFIN) specializes in developing blockchain-based transactions for importers and exporters. Its blockchain systems provide swift resolution of transactions through smart contracts, where the payment can automatically be released when its criteria are fulfilled. The company has recently taken a step into micro-lending through the acquisition of Ziddy.com, a company applying blockchain to micro-lending. The move brought a 2,600% jump in the value of LongFin’s shares.
Direct banking and payments company Discover Financial Services (DFS) has identified blockchain as one of the most important technologies for the future of payments. Together with the Chamber of Digital Commerce, it is running a code-a-thon to encourage programmers in this area. “Discover is always looking at ways to improve the payments experience for customers and merchants and we are excited to explore how blockchain may be able to contribute to our mission,” said Bill Dulin, vice president of Global Business Development for Discover.
It’s a mission that many innovative companies now share, and to which blockchain will be critical.
For more information on Global Payout, visit Global Payout (GOHE).
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