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Blockchain and payment systems: What are the benefits and costs?

Author

Listed:
  • Neyer, Gene
  • Geva, Benjamin

Abstract

The discussions of how blockchain technologies (blocktech) will disintermediate or transform the payments business continue. To date, the discussion has largely focused on the possibility that, in the near future, the technology could enable a nominally priced, frictionless value transfer process. An examination of the benefits and costs indicates that, at the current level of maturity of technology and legal frameworks, blocktech is not superior to existing mechanisms, except in certain niche circumstances. This, coupled with the lack of viral adoption characterising recent successful adaptations (eg Facebook), indicate that major breakthroughs are required before there is wide adoption of this new paradigm in payment systems.

Suggested Citation

  • Neyer, Gene & Geva, Benjamin, 2017. "Blockchain and payment systems: What are the benefits and costs?," Journal of Payments Strategy & Systems, Henry Stewart Publications, vol. 11(3), pages 215-225, November.
    • Handle: RePEc:aza:jpss00:y:2017:v:11:i:3:p:215-225
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    More about this item

    Keywords

    blockchain; blocktech; digital ledger; payment system; cryptocurrency; Bitcoin;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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