The PAYTECH Book

The Future is Already Here; It is Just Not Evenly Distributed

By Ali Sohani

Founder and Chief Technology Advisor, Optimizia

Rafi Ullah Khan

Head of Data-Science, Optimizia

and Suneel Kumar Rathod

Head of Blockchain, Optimizia

Introduction

At present, payment infrastructures at the national as well as the international level are mostly in the form of messages and rely on the exchange of files amongst parties. If the deployment of distributed ledger technology were to be adopted on a large scale for payments, it would provide significant benefits for both payment and money transfer mechanisms.

Payments would no longer require heavy clearing and settlement systems, while companies would have a real-time accounting ledger in their enterprise resource planning (ERP) or treasury management systems. This would also enhance security of payment systems significantly. The best option is to introduce crypto-tokens, that will be part of a peer-to-peer cryptocurrency whose value would also arise from the market. Pricing would be according to how much it is worth to consumers; a basic supply and demand model. People would purchase tokens from exchanges at market value and use these tokens instead of paper money. All the transactions would be logged using distributed ledger technology (DLT).

By adopting such a DLT system, several transparency and security benefits could be realized.

The Process of Exchanging Value

Generally speaking, a payment refers to the process of transferring value ...