According to the recent report of Cryptoglobe, Rohit Kulkarni, a former Citigroup financial analyst, considered that blockchain technology has caused massive damage to the payment industry with a market size of $100 trillion. By analyzing the intersection between venture capital, initial public offering (IPO) markets and emerging financial technologies, Kulkarni said that the dominant position of traditional financial institutions is becoming unstable.
According to Kulkarni’s research, $140 billion has been invested in more advanced mobile network development and distributed ledger technology (DLT) technology optimization. He predicted that customer’s concern about data and privacy and regulatory changes may affect the payments industry.
Kulkami proposed five key reasons why emerging financial technologies such as blockchain disrupted the daily $5 trillion foreign exchange market. His research company (SharesPost) explained why new financial technologies undermine traditional payments and banking systems. The first reason is that the $100 trillion global payment industry is facing fierce competition from SMEs. According to the SharesPost study, these competitions focus on cross-border transactions, peer-to-peer services (P2P), retail and e-commerce. Kulkami mentioned that the blockchain alike ripple blockchain
or xem nem blockchain
, and smart contracts will redefine the relationship between customers, suppliers and sellers.
The second reason is that in 2017 there were 1,800 transactions totaling $40 billion in investments to improve payment technology. Kulkami also pointed out that in the first half of 2018, there were 800 financial technology investments. Only Robinhood, Credit Karma, Shanghai Financial Link (OneConnect) and Armor Payments, the US version of Alipay, invested $2 billion to improve operations.
In addition, large venture capital firms such as the US-based startup incubator Y Combinator, Digital Currency Group and Sequoia Capital have invested the most in blockchain and related financial technologies. Kulkami hinted that these investments will lead to the development of legitimate products.
The third reason is the introduction of new technologies and consumer behavior is changing. Researchers have pointed out that convenient one-click payment systems such as WeChat and Alipay have greatly improved the user experience.
The fourth reason is that blockchain payment systems can completely bypass financial institutions and allow direct payments between parties, which will replace outdated payment systems, including ethereum wallet
and tron wallet
The fifth reason is that regulations on customer data and consumer protection are changing, and traditional financial institutions no longer monopolize their customer data. New regulations introduced in Europe require banks to share their customer data and allow merchants or trading companies to directly access customer account information, thereby increasing payment speed and efficiency.