Blockchain has made major waves in a variety of industries ranging from restaurants to retailers. However, the biggest area of focus for blockchain for many is still on the payments side.

It is obvious why many are focused on payments, since this is one area that blockchain can majorly transform from many different angles such as cross-border and security. Blockchain Tech News spoke with Andres Ricaurte, SVP and global head of payments at Mphasis, an enterprise transformation company based in Bangalore, India, to get his take on how blockchain will empower and transform the payments industry.

Q. What are some of the ways companies are using blockchain to improve payments?

A. From large banks and enterprises optimizing global liquidity, to retail stores accepting payment in digital currencies, to new forms of customer identification for retail transactions, blockchain is permeating the payments landscape at an accelerated space.

We see clients in every industry — be it insurance, logistics, real estate, healthcare, transportation, e-commerce, commercial and consumer banking – tapping into blockchain as a source of efficiency, innovation and competitive advantage. And, as the global payments ecosystem continues to transform in response to a rapidly shifting commerce landscape, we are seeing the number of blockchain applications in payments exponentially growing.  

Q. What are some barriers to wider blockchain adoption?

A. One of the primary barriers is the complex global regulatory framework surrounding money and its underlying infrastructure. Central banks, governments and regulatory bodies around the world have varying perspectives and attitudes towards blockchain and its implications to critical matters such as money supply, privacy and financial crime.

As a result, most payment-related innovations either get trapped in ‘proof-of-concept’ mode with limited options for global scale, or end up buried in complicated cross-jurisdiction approval processes. We are seeing the greatest success in cases where companies can marry the merits of blockchain technology with the reality of their regulatory environment, to create pockets of opportunity where the innovations can be rapidly and exponentially scaled. 

Q. Where do you see the future of blockchain in payments?

A. Most established payment systems were designed decades ago, for a different social, economic and political reality. While they are considered to be reliant, secure and stable, these centralized systems have not been able to catch up with the needs of our digital, open and hyper-connected world.

Blockchain presents a fundamentally new way to transfer information and value over digital networks. As such, when we speak to our clients, they have no doubt that this technology will play a huge and central role in payments, underpinning core market infrastructure as well as end-user products. We will soon see tokenization powering new forms of real-time payment rails that blur the lines between currencies and countries; and cryptography solutions like zero knowledge proof shifting paradigms in areas such as identity, compliance and data privacy.

Q. What do you see as the future of blockchain in general?

A. Cloud technology transformed how companies build and operate products. Blockchain is transforming how these companies and products coexist in an open digital economy, where trust, speed and transparency (at scale) are paramount. Blockchain has the potential of enabling the promise of the internet as it relates to transactions by creating new models for ownership and value transfer.

An area where we are seeing great traction is trade finance, a traditionally complex industry plagued with manual and inefficient processes. By bringing together the physical flow of goods, the underlying documents, and the financial rails that underpin trade finance, blockchain is demonstrating its potential to help create a flexible, frictionless and borderless business-to-business commerce experience. 

Q. Will we see banks adopt blockchain in mass?

A. As we mature from highly centralized and country-specific financial systems to a more flexible, inter-operable and open global framework, the role of both commercial and central banks will need to evolve. Not surprisingly, the focus on blockchain from banks of all sizes is increasing at an accelerated pace.

Use cases range from consumer products that streamline the identification of customers to create instant check-out experiences, to business solutions that improve access to working capital and reduce supply chain risks. Balancing proprietary blockchain innovation with multi-bank acceptance and interoperability will be key to developing sustainable propositions that provide choice and flexibility to customers.