How Payments Processing Will Change

tl;dr: One day, we will look back at invoicing and payment processing of the early 21st century with the same perspective that we view telegrams and the Pony Express.

The other day the NSM Finance team was going through some of the invoices we had sent to clients and event planners.

For one invoice, we did not find a check in hand or any proof of deposit in the NSM bank account. That kicked off the follow up process to the event planner. He believed he had already sent the check.

Naturally, this was a back and forth email thread involving more than a few people.

As I heard this story, I thought about how this method of payment, receipt, and proof-of-payment is so common. We take it for granted.

Then, I contrasted it with how transactions work in the world of crypto.

How Transactions Work in Crypto

If I owe you some money, I ask for your crypto wallet address.

Then, I send you a transaction confirmation number (a hash really) that shows it on the blockchain.

None of these are my transactions, but here’s one for 21 Ether on Ethereum and another for 9.2 Bitcoin. This type of proof-of-payment is available of every blockchain from ARK to Zcash.

It’s so simple and elegant. Once I send you the transaction hash, I’ve proven to you that I sent you the funds. That is it.

Not only is the money in your account almost immediately, but there’s easy proof that it was sent.

Bitcoin transactions may take 10 minutes to confirm but that’s certainly faster than ACH transfers or checks by mail and cheaper than wire transfers.

And, as shielded addresses on Zcash and other tech like Mimble Wimble become more robust, I will still be able to prove it to you, but the amounts will be private from others.

Habits Change Slowly

I realize that this is not going to happen overnight, but when finance teams start having (or even demanding) this type of speed, proof, and clarity, it will be a big deal.

Lower friction in accounts payable and accounts receivable and lower operating costs.

More capital flowing towards innovation where it belongs.