Decentralized finance may be the answer to bankings payment rails problem
- CEO Thejo Kote told TechCrunch+ that the company had to scramble to help customers make sure their payroll and vendor payments were able to resume and also remain secure.Current payment rails, particularly in the U.S., are decades old, created long before digital payments became a way of life.
- Visa, too, recently partnered with PayPal, which also owns Venmo, and others to help people make digital payments regardless of which app you use.But even with these new rails, some fintech founders say decentralized finance rails built on the blockchain could be a better answer.
- We’ve seen newer rails emerge in recent years, for example, the blockchain, and within the consumer realm with peer-to-peer payments via apps like PayPal, Venmo and Zelle.
- Most of the payments occur in real time.Airbase was one of those fintech companies that had its payment rails with SVB.
- In recent years, financial technology companies have built new rails, for example Stripe, Plaid and the like, but it takes years and millions of dollars to do it.
- Especially as building on the current aging payment rails is expected to increasingly be a problem.
Aging payment rails is not a new problem for the U.S. banking infrastructure, but Silicon Valley Banks collapse put it in the spotlight, especially for payment companies that had their payment rails [+1947 chars]