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5 Payment Processing Challenges & How Bitcoin Lightning Solves Them

5 Payment Processing Challenges & How Bitcoin Lightning Solves Them

Payment processing fees have long been contentious. The hefty costs associated with payment processing are largely dominated by traditional providers, and avoidable weaknesses expose businesses to chargebacks and fraud. Businesses across the world surrender significant portions of their revenue to accept and send payments but are inundated with wire fees and time-sensitive delays. According to a 2021 McKinsey report, the tax on global commerce topped a whopping $1.9 trillion. Losses related to security breaches and the cost of security protection are also of importance to businesses. These challenges have left businesses of all sizes feeling like they don’t have any options when it comes to finding an easier, cost-effective way to process payments. The Lightning Network aims to tackle such challenges within the payment processing world. Native to the Internet and designed for the future of transactions, payments via the Lightning Network transfer value at the lowest possible cost. 


How Lightning Tackles Traditional Payment Processing Challenges
 

  • Security 

 One of the biggest challenges in payment processing is security. Without the proper systems in place, things can go wrong in an instant and businesses must jump through extraordinary hoops to get secured again. With Lightning, security is enforced by blockchain smart contracts without creating an on-blockchain transaction for individual payments while getting the security of Bitcoin’s base chain.  

  •  Lack of Integration 

 In many cases, businesses update transaction records into their books manually, especially if they are using an outdated payment platform. Checks still accounted for 29% of B2B transactions in 2019. This work is tedious after processing a transaction and can expose businesses to various risks such as information loss, wasted resources, and duplicated data.  

By turning to a Lightning-supported solution, businesses can save time and reduce errors by having transaction records updated automatically and in real-time. This also boosts processing efficiency while allowing more time to focus on other pertinent business needs. 

  • Low Processing Fees 

 The interoperability inherent in Bitcoin and Lightning protocols provides accessibility and universal compatibility that has unmatched network effects. In the Lightning Network’s ecosystem, hundreds of thousands of transactions can process per second at almost no cost. Payments benefit from instant and final settlement, zero fraud, and zero chargebacks. 

  • Multi-Channel Payments 

 If your payment processing solution only supports a select card reading and payment processing features, this might hinder efficiency. You might find yourself using one vendor for POS payment processing, another for online payments, and an entirely different processor for on-site deliveries.  

Using multiple vendors means varied and multiple solutions that increase complexity and costs. Fortunately, Lightning is a multi-channel integrated payment solution. By consolidating all payment processing types under one unified solution, you can ensure a faster, simpler, and more affordable payment processing experience. 

  • Lack of Support for A Positive User Experience 

 When you have a payment processor that doesn’t operate after regular business hours, this can make it challenging to find support if you run into any outages or issues after hours. Bitcoin payments radically simplify processing and improve user experience because they eliminate the intermediaries, complexities and delays inherent in the structure of traditional payments. Unlike centralized payments dominated by the traditional players, Bitcoin payments are accessible, borderless and require only an internet connection and software to work. 

Businesses navigating the ups and downs of traditional payment processing understand that it’s not an easy task and can present unique challenges. As such, it is important for businesses to choose a better option to effectively tackle payment processing woes. At BlockSpaces, our Lightning Connect solution is carefully designed with security, fast set-ups, and customer service in mind while utilizing the Lightning network. Whether you are looking for non-custodial node setup or powerful app integrations, Lightning Connect fulfills all business needs. We do what we do best so you can do what you do best.  

If you are interested in learning more about Lightning Connect or are ready to get on the waitlist, learn more here

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