In this white paper, a "blockcloud" is envisaged, embracing payments services from remittances to networks and much else: at the heart of such a service is the blockchain. As described below, the blockchain, with due modifications and improvements, has the potential to form a new and comprehensive payments infrastructure.
The cards and payments industry has always been in a state of evolution through innovation. No other part of the financial services industry has seen so much action in the last forty years. Until now, the industry has continuously introduced new products and innovative services — most of which have ridden on technology. We have seen the evolution of credit cards and the break-out of debit cards, cobranded cards, rewards programmes, prepaid cards and many other forms of consumer cards. The technology platforms on which the cards industry is based have also evolved at a breakneck pace. The phenomenal growth of the internet has led to an even more explosive growth in cards and consumer payments that would have been impossible otherwise.
However, none of these developments have changed the core operating model of the payments industry. The cards industry has always operated on a three/four party model whereby Issuer, Acquirer, Merchant and Network play their assigned roles in enabling cardholders to use their cards.
The launch of cryptocurrencies like bitcoin is the first time that the cards industry is looking at a disruptive challenge that may change core fundamentals and reset the industry as never before. While bitcoin is the most visible disrupter, it is important to understand the underlying technology called the blockchain, which is looking to be a game changer.
Blockchain technology has been seen as the oyster around the pearl of bitcoin and, until recently, that 'pearl' got more attention than the oyster. However, blockchain technology is now garnering significant attention and is being evaluated as a technological innovation that may change the layout of the financial services industry.
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