A Hotspot for Innovation: Using Blockchain Technology for E-commerce (FinTech)

03-02-2022

By Nicole Mirabal

Digital businesses have been gaining traction over the years, nonetheless, Canadians have presented with ambivalence towards adapting this new business practice. However, when faced with the physical limitations bestowed by the global pandemic, more and more businesses turned to digitization as a form of servicing their customers.

Nevertheless, Canadians continued to present with some resistance to any digital business that would require digital monetary transactions and/or the use of sensitive information, which begs the question, is there a need for blockchain technology innovations for the e-commerce sector to thrive?

Let’s take a further look…

Upon examining the needs of consumers of digital goods and the current market offerings, the following needs emerged from either consumers, business owners, or both:

  • Increased Virtual Security

According to a survey in 2018, approximately 50% of Canadians feel comfortable performing monetary transactions online to various extents (Chevalier, S., 2021). Equally as important, this data also indicates that 50% of Canadians do not feel safe partaking in online transactions. With identified concerns of unauthorized access to sensitive information, such as monetary assets and/or theft of self-identifying data, digital users present with a need for a platform that provides an elevated sense of security.

With one of the greatest assets associated with Blockchain technology being its ability to provide increased security, blockchain technology innovations in the e-commerce sector that increase the consumers’ and business owners’ sense of security may bring great prosperity. Designed to prevent unauthorized access to sensitive information, such as monetary assets or self-identifying data, blockchain technology can enable both consumers and digital business operators to easily manage transactions with minimal risk.

  • Transparency

One of the greatest barriers when it comes to e-commerce is a lack of transparency. In contrast to in-person shopping, consumers appear to lack trust in the business provider as online shopping eliminates some elements of control.

With noted uncertainty regarding the quality and/or delivery of services, and/or monetary transactions, it is evident that consumers may benefit from an online shopping system with greater transparency. Since blockchain technology can allow users to clearly track their transactions, it may be advantageous in this industry.

  • Accessibility

In a survey in 2018, Canadians recognized the ability to virtually browse through a larger selection of products as one of the advantages associated with virtual shopping (Chevalier, S., 2021). However, the expectation for accessibility to relevant and new products may come at a disadvantage for digital business owners. With the competition in the e-commerce sector rising daily, e-business owners must keep up with consumers’ expectations to remain relevant, and blockchain technology may be the solution. 

Recent innovations in the blockchain sector facilitate access to goods and/or services worldwide. Whether it be through near-zero fee transactions or through secure information transfer, blockchain technology has demonstrated its potential for connecting any buyer with any product or service regardless of geography. As a result of the evident potential associated with blockchain and the identified business need, blockchain innovations may be highly sought out for this attribute in the highly competitive e-commerce landscape.

  • Financial Flexibility

When interviewed about their online purchasing habits, Canadians reported purchasing higher ticketed products primarily from local retailers, and lower-priced items from the U.S. or international retailers (Chevalier, S., 2021). One can speculate that this purchasing habit may be related to the ability of Canadians to finance themselves through local central authorities. However, this online shopping habit may present an issue for both local and international online business owners, and an opportunity for blockchain technology innovators. 

Since the underlying cause of this shopping habit appears to be a lack of digital financing options, blockchain technology innovations that allow users to purchase items in different ways may allow Canadians to shop for higher-priced items worldwide. Blockchain technology innovations for digital loans, collateral, credit, or payment installments, can meet the identified increased need for new payment methods within e-commerce checkouts (Rolfe, 2022).

In fact, emerging digital payment innovations involving cryptocurrencies and digital wallets are already showing vast success in e-commerce markets in China, projecting China to own more than one-third of the e-commerce market within the next four years.  For these reasons, e-commerce business owners will require blockchain technologies to adapt to this need and to service the current and forthcoming market.

Key-Takeaways:

Although Canadians are slowly adapting to the online shopping experience, many have expressed that they continue to expect all in-person services to be available within digital channels (Rolfe, 2022). More specifically, Canadians are expecting: a vast catalog of products, receipts, transparency, zero-fee payment options, and more, many of which could be achieved with blockchain technology.

Additionally, blockchain technologies have already begun to penetrate the e-commerce sector in some countries and are associated with its overwhelming success. As more e-businesses search to outperform their competitors and identify the ability for blockchain technology to fulfill its needs, one can predict that the demand for blockchain innovations will be at an all-time high, causing blockchain technology to become the standard for e-commerce.

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Author

Nicole Mirabal

Nicole Mirabal

Brand Content Executive