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Solana Pay – A New Outlook Towards Merchant-Customer Payment Relationship

Altcoins

cryptoknowmics.com 13 May 2022 00:41, UTC
  
Reading time: ~4 m

Solana promises to reshape the world of payment with the availability of transaction requests for merchants and developers.  Solana said, “it’s now possible to bring any Solana transaction into the real world through an interactive request between a checkout app and a mobile wallet, enabling NFT minting, dynamic discounts, tokenized loyalty programs, and so much more”. Key points are as follows:

  • Merchants can communicate with customers in a two-way manner. The feature helps merchants to provide customized transaction links to users. At the point of sales, they can mint NFT or transfer loyalty tokens
  • Merchants can pay transaction fees on behalf of their customers so that they don’t need to have SOL in their wallets.
  • Merchant can refuse to reply to a transaction request. It can be then used to allow permission requests.
  • According to Solana, merchants and brands can create a dynamic experience that sends gifts to customers, tokens and invitations.

In this article, we will explore what Solana pay is all about and how it promises to be ground-breaking. But before that, we need to understand what Solana is and how it works.

What is Solana?

Founded in the year 2017 by Anatoly Yakovenko, Solana is an open-source project that implements a new permissionless, high-performance blockchain. Unlike Ethereum, Solana is substantially faster in terms of transaction processing and has significantly cheaper transaction costs. Solana uses both proof-of-stake (POS) and proof-of-history(POH). Proof-of-stake is a consensus technique used in cryptocurrencies to process transactions and create new blocks on a blockchain. The consensus technique is a way of validating entries in a distributed database while also keeping it safe. In POS, Validators (those who add transactions to the blockchain ledger) can verify transactions based on how many coins or tokens they own. Proof of History can be used to cryptographically verify the passage of time between two events. It employs a cryptographically secure function that must be fully executed to generate the output and cannot be guessed from the input. With PoH transactions can be timestamped and confirmed swiftly.

What is Solana Pay?

A new payment system, Solana Pay, heralds a new era of payments and commerce. It is a peer-to-peer protocol and authorizes a developer to incorporate standardized payment into their apps and services. The protocol specifies how a customer can transmit digital dollar currencies such as USDC directly from their wallet to a merchant's account, settling instantly with charges measured in fractions of a penny. Loyalty offers and incentives are all integrated into the same messaging strategy, making them true building blocks for the future. For impeccable transactions, the Solana blockchain confirms the transactions in less than a second without any intermediary. It claims to do 65,000 transactions per second. Furthermore, the advent of Solana Pay has paved the way for several customer-friendly features, such as the ability to pay using a QR code or web browser plug-ins. SOL tokens and a few other stablecoins can benefit from these improvements. There are a few supporting wallets namely  Phantom and Solflare. 

How Solana pay works:

The following points highlight how the Solana pay works.

  • The customer will scan the Merchant QR code on their wallet app which will be interpreted as Solana pay transaction request URL
  • The wallet sends a request to the merchant API over HTTP.
  • The merchant will receive a wallet address and can respond with the customized transaction
  • Just like any other transaction, the wallet will show transaction details to the customer. Also displaying the merchant icon and URL
  • The customer approves (or declines) the transaction by signing it with their private key and sending it to the network.

The downside of Solana Pay

Solana has been putting all its efforts to bring the best to its users. However, there are a few flipsides to it.  Since Solana pay is in its nascent stage, businesses might run the risk of losing their assets due to an attack on the network or any programming error. It is highly possible that if the business doesn’t have crypto knowledge, it might face basic errors related to the use of the crypto wallet.  Another drawback is that it may face Ethereum's large user base. Even though Solana is faster than its competitors, Ethereum gives it a major face-off in terms of it being a bigger platform. 

Conclusion

With Solana pay, businesses can look forward to utilizing the blockchain's potential at the same rate as traditional payment networks. Without any interference from the intermediaries, Solana pay is all about the customer-merchant relationship. This has opened up a new chain of communication. It is fast, easy, direct, and energy-efficient also. With this Solana promises to bring in a new perspective on offers, rewards, and merchant-customer relationships.


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