In today’s world, the system of cash and payment processing are changing before our eyes. The advent of Check 21 brought a sea change to check-cashing procedures by digitally capturing the images of the check at the local bank level. This change brought an end to transferring cashed checks to the bank’s regional center for scanning and notation. Banks could just transfer the images of the checks through the internet to the processing center in a manner of clicks of a mouse.
With the increased popularity of cryptocurrency and the semi-acceptance of Bitcoin, the need for financial institutions are slowly becoming less and less. With electronic cash (crypto) now becoming more and more accepted, the need for a payment processing service that sidesteps the use of banks and credit unions has arrived.
The use of a peer-to-peer iteration of electronic cash could be used to send payment from one user to another directly. Using financial institutions as a third-party processor has its drawbacks as they become mediators in disputed transactions between two parties. This mediation slows down the entire process of payment and increases the cost of transactions in the form of fees to the institution.
The implementation of a system for electronic transactions would decrease fraud and deceptive practices. It would also leave the power and mediation between the two parties (using an escrow) in disputed transactions. This change would also decrease the cost of transactions and improve privacy.