Payment processing in ecommerce is an obvious use for the blockchain. Done correctly it has the potential to eliminate a tremendous amount of friction and cost. While removing the ~3% transaction fees charged by current payment processors would be substantial, payment processing is just the tip of the iceberg on how the blockchain can benefit the entire ecommerce ecosystem.
In addition to payment processors, there are several other middle men who make money on unnecessary friction. Blockchain technology has the potential to remove these fat cats from the equation altogether. There are gigantic middle men profiting from the friction in affiliate networks, influencer marketing, ecommerce advertising, supply chain, and shipping just to name a few.
For example, take Rakuten, the $12 billion market cap parent company of Ebates and other ecommerce properties. Earlier this week, they announced Rakuten Coin, a private blockchain-based token. Unlike a fully distributed blockchain solution, the end consumer and store owners won’t fully benefit from Rakuten’s solution. Rakuten, by this ploy, is merely switching one form of friction for another… boo!
Two of my favorite thought pieces on Ecommerce’s and the Blockchain were written by Louie Bacaj, head of the growth engineering team at jet.com. Read Part 1 and Part 2 of his Ecommerce on the Blockchain series and you’ll get an even better idea of what’s possible.
Stay tuned… this won’t be the last you hear of ecommerce on the blockchain from Engine. In addition to being huge blockchain fanboys, we are actively working on several proofs of concept for our ecommerce platform.