Erratum: The following article was published with a factual error, and was corrected on 2024/02/28 at 13:39 UTC The article had references to “zero fees” on Solana Network. The statement was updated to “near-zero fees.” The article also made references to the “Solana team,” which was updated to the “Solana Foundation” team, for better clarity. The article has been amended and updated.
- Founder highlights just how expensive credit card fees are.
- Solana’s team reveals their view on credit cards to DailyCoin.
- The team highlights its partnership with credit card giant Visa.
With its steep fees and processing delays, the traditional credit card payment system has long been a point of contention for merchants and consumers alike. Enter Solana, a high-performance blockchain platform with zero-fee transactions.
Most recently, Solana Mobile sales highlighted how much merchants must pay to credit card companies. Its team spoke to DailyCoin and shared its plans to challenge the long-standing dominance of credit card companies.
Solana’s Near Zero-Fee Transactions vs Credit Card Fees
Last week, following record sales of Solana Mobile’s Chapter 2 phones, Anatoly Yakovenko, co-founder of Solana, brought high costs of credit card fees to light. He revealed that credit card sales on a $20 million volume incurred over $600,000 in fees. At the same time, Solana’s blockchain-based transactions, in partnership with Shopify, processed an equivalent volume at near zero cost. Still, despite higher costs, most merchants still use credit cards.
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“Credit cards are deeply embedded into the legacy financial system,” Josh Fried, Head of Commerce and Business Development at the Solana Foundation, told DailyCoin. “Offering a viable, more efficient, alternative such as blockchain-based payments will take time to establish broader adoption.”
Solana stands as one of the most promising alternatives in this regard, he claims. “The Solana network, in particular, offers incredibly fast transaction speeds at a low price point, making the network the ideal blockchain for everyday transactions involving blockchain-based payments,” Fried points out.
Another advantage of blockchain networks like Solana is their decentralization. Decentralization ensures credible neutrality, enhancing trust among users by providing a system that operates transparently and fairly. “If a blockchain is meaningfully decentralized then there is generally more confidence among users that those systems are operating in a fair and transparent manner,” Fried adds.
How Solana is Overcoming Adoption Barriers
Despite its advantages, Solana faces challenges in achieving widespread adoption for its payment solutions, notably in the realm of e-commerce. Fried acknowledges the hurdles, including the time it takes for new technologies to gain traction and the need for regulatory clarity. This, however, is not unique to the blockchain industry, and he remains optimistic about the future of blockchain-based payments.
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Moreover, Solana is also looking to expand its adoption by partnering with major payment networks. Thanks to Solana’s “exceptional scalability, cost efficiency, and near-instantaneous transaction speeds, Visa chose Solana to scale its USDC settlement pilot program,” Fried reveals. This collaboration with Visa, alongside the integration of Solana Pay with Shopify, underscores the growing demand and potential for stablecoin payments within the Solana ecosystem.
On the Flipside
Solana’s blockchain, while celebrated for its speed and efficiency, has faced criticism due to occasional network outages. These incidents highlight the technical challenges inherent in maintaining a high-performance, decentralized network.
Another aspect to consider is the intense competition within the blockchain space. Solana, despite its advantages in transaction speed and cost, is not the only blockchain seeking to revolutionize the payment industry.
Why This Matters
By offering a viable alternative to traditional credit card payments, Solana promises to reduce operational costs for merchants. Moreover, it contributes to the broader adoption of digital currencies.
Read more about Solana Mobile Saga’s preorders:
Solana’s New Phone Bags 30k Preorders Ahead of 2025 Release
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