Potential of Blockchain Technology in eCommerce Business

Last updated on September 1st, 2023 at 06:56 pm

Blockchain technology has lots of potential for the eCommerce business. Nowadays, we are using it to perform three basic functions. First, we are using it to make the payments. Secondly, we are also using it in the supply chain. Thirdly, it has ensured the decentralization of the marketplaces. Blockchain technology is a distributed ledger. We can easily use it to record transactional data. After recording the transactional data, we can store it on different computers. When it stores the data in the form of blocks, you can easily get access to them before and after blocks. Here, we will discuss the potential of blockchain technology in the eCommerce business.

Frictionless Payments:

Traditional financial settlement systems are creating lots of problems for eCommerce businesses. First, these are time-consuming payment methods. Secondly, these are expensive payment methods. Thirdly, these payment methods require manual processes. All of these things are creating problems for the businessmen. Moreover, they also require the validation of the third-party for making and receiving payments. Blockchain-based currencies have solved these problems of businessmen. For example, if they use Bitcoin, they don’t require validation of the third-party. Moreover, consumers can make direct payments to the merchants. They can receive the payments just within few minutes. After receiving the payments, they can immediately send the products to the consumers. It is also providing the best opportunity to the businessmen to reduce the costs of the back-end settlements.

Automating Contact Enforcement:

By using the smart contract feature of blockchain technology, businessmen can create programmable money. According to this smart contract, the customers have to pay money if a company fulfils the specific needs of the customers. This technology is also facilitating the exchange of money, property and shares. Smart contracts are different from traditional contracts. In smart contracts, you can define rules and penalties just like traditional contracts. After defining these rules and penalties, it will automatically enforce the obligations. On the other hand, we can’t see automation in the enforcement of obligations in traditional contracts. For example, you can purchase a car directly from the manufacturer by making this contract. If you don’t receive the car within the specified time, you can refund your money. On the other hand, if you will receive the car, it will make full payment to the manufacturer.

Fraud Reduction:

The eCommerce businessmen have to face the problems of frauds in their businesses. The fraudsters try to impersonate the accounts of legitimate customers. The usernames and passwords of these customers are easy to obtain. After obtaining these usernames and passwords, they can easily take over their accounts. When they make payments through these accounts, account holders claim for this money. In most cases, eCommerce businessmen have to refund money to the account holders. As a result, they have to suffer double loss. If they will use blockchain technology, they will never face this problem. Blockchain technology has introduced distributed ledger. With the help of distributed ledger, they can create trusted identities. As a result, multiple parties can verify the other parties. More and more websites add cryptocurrency payments to their website. They use off the shelves solutions or contact companies like Webisoft.com to do it for them.

Supply Chain Gains:

Due to the sophisticated supply chains, large enterprises are facing lots of problems. In these problems, there come the problems of tracking, verification, purchases and shipments etc. Most of the problems occur due to the paperwork in the companies. Companies can easily get rid of these problems by eliminating the paperwork. For this reason, they have to introduce blockchain technology. When they will use blockchain technology, they can introduce tamper-proof master ledgers. This technology is also offering the best system to record payments. The companies have to make only one entry. As a result, they can save their companies from the problems of duplication. Moreover, it is also the best way to introduce transparency in their operations.

Promotion of Transparency in the Marketplace:

As recommended by a dissertation help firm, if you want to give a sense of security to the consumers in the marketplace, you will have to promote transparency in the marketplace. In the past, eCommerce businessmen have to face lots of problems due to the lack of transparency. With the development of blockchain technology, we have resolved this issue. To provide security to the consumers and suppliers, this technology has provided the slightest changes in the transactions. As a result, the businessmen have created a decentralized environment for the customers. Lots of companies like Walmart and Unilever are also working on blockchain technology. They are showing their intent to promote transparency in the marketplace.

Product Reviews Stay Genuine:

Before purchasing a product, most of the customers read the reviews of the products. If they read the fake reviews of the products, they try to buy these products. This thing becomes a cause of the loss of money. In the case of blockchain technology, you may not face this kind of problem. This technology is allowing the companies to verify the reviews. Moreover, it is also prohibiting businessmen to erase their history without notifying the customers. Blockchain technology keeps the data in the blocks. After keeping the data in the blocks, it adds the data in the chain of similar information blocks. If you want to get access to specific information, you will have to get verification from a system of networks.

Reduced Cost for Retailers and Consumers:

If a merchant is making and receiving payments by using eCommerce payments, he has to bear a cut of a specific amount in his profit. Due to the involvement of lots of players in the transaction process, the consumers have to pay more money. In the case of blockchain technology, consumers and retailers don’t need to face this problem. Blockchain technology is ensuring direct contact of the retailers and consumers. Due to the elimination of the middleman, they can make direct payments. It is also streamlining the customer outreach. After streamlining the customer outreach, it is reducing the costs of the consumers. According to a report, eCommerce businessmen will save an amount of almost $20 billion by 2022. That’s why it is the future of the eCommerce business. 

Provided By VAT reporting software company, Sovos