How DeFi Solutions Can Transform The eCommerce Industry
Posted By : Priyansha Singh | 11-Apr-2022
DeFi and eCommerce
At first glance, decentralized finance and eCommerce may only seem tangentially related as co-existing sectors of the ever-increasing online economies of the 21st century. However, a closer look uncovers a plethora of use cases to combat ongoing issues within the eCommerce space and furnishes profound benefits to businesses and customers alike.
DeFi services, without a doubt, offer better prospects for businesses by lending money and extending an additional layer of security measures for their assets. Moreover, it also addresses the existing eCommerce issues such as supply chain management, safe payments, order history, and more.
With the retail industry experiencing tectonic shifts in operational activities in the past few years, here we explore multiple ways in which DeFi and eCommerce could amalgamate to offer novel solutions to persistent problems and enhance the overall experience of online shopping for everyone included.
This blog will unveil how blockchain-powered DeFi solutions are actively improving the eCommerce service sector and what advantages they present to the online shopping community.
DeFi: Revolutionizing Digital Payments and Traditional Ways of Retailing
The gargantuan rise of Amazon from a second-hand bookseller to a purveyor of every possible consumer good on this planet kick-started the love affair of the entire world with online shopping. Along with an impressive number of ever-surging competitors from all across the globe such as Rakuten in Japan and Alibaba in China, there are now more opportunities to become a merchant and sell your goods online. Moreover, with the pandemic still haunting the world, the trend of online shopping is only set to continue.
Sellers leveraging these eCommerce giants can end up giving over 20% of the price as commission fees, ultimately largely affecting their profit margins, which could potentially save in a decentralized setting.
Direct selling furnishes an alternative to retailers, who can use the online space to launch niche and innovative products, free from the constraints of traditional brick and mortar stores. However, direct selling can also be exposed to the inescapable dominance of credit cards such as MasterCard and Visa, which take up their own commission up to 3.5%.
This is where DeFi or Decentralized Finance comes into a major role play. By leveraging blockchain technology to facilitate P2P transactions, it cuts out the middlemen such as credit card companies. Subsequently, it offers the most obvious and predominant benefits carved out from the synergy of DeFi and eCommerce.
Furthermore, the potential for theft and fraud associated with traditional payment methods is well known and causes steep losses every year. It is predicted that massive $40 billion losses are expected to occur by the year 2029.
Many of these losses generally end up hurting eCommerce businesses themselves instead of credit card companies. To mitigate these issues, DeFi could only come as a refreshing relief, especially for small and mid-sized businesses that are less able to withstand tremendous financial shocks.
Benefits of eCommerce and DeFi integration
While we have already covered some of the prominent benefits of DeFi-based solutions, let us take a quick look at some of the additional merits of DeFi development services for the eCommerce industry.
- For online retailers, blockchain design enables effective omnichannel selling without compromising the functionalities and operations of conventional systems, offering better sales propositions.
- Blockchain technology and DeFi altogether take their initial steps by removing intermediaries from basically any phase of usage. This provision allows for a better benefit, thereby reducing the transaction costs prominently.
- With DeFi integration in eCommerce, transactions are both secure and quick. Since intermediaries are not involved, the transaction takes fewer stops before being completed.
- DeFi services offer robust payment methods that practically work better. Transactions can be made through frictionless wallets that are securely designed and developed with custom blockchain integrations.
- It is impossible to change any information on a blockchain without gaining network consensus. It ensures that not only your stored information is safe but also entitles you to have access to transaction history from the beginning.
Use Cases of DeFi and eCommerce
- Identity management and data security
As more and more people use online platforms to perform transactions, the digital footprints that they incessantly leave behind are unprecedented. Every time customers enter their personal or bank data on any eCommerce website for payment purposes, it is exposed to various web databases that are prone to security breaches and privacy vulnerabilities.
By securing individual identities against misuse, theft, and fraud, blockchain-based identification can enable merchants to build robust authentication methods as well as encrypted digital identities for optimum data protection and identity security.
- Supply chain management
For any eCommerce site’s success, the supply chain’s dependability and management are absolutely critical. Streamlined and consistent supply chain procedures help store operators in determining when new stock will arrive and what stock is in the pipeline, thereby ensuring that suppliers deliver the exact product and goods as requested.
Custom blockchain-based enterprise services and DeFi solutions can enable eCommerce companies to adhere to the procedures and assure that goods are not substituted without notice. As a result, features such as precision-tracking and traceability add transparency to the entire supply chain process.
- Ownership of a virtual property
Usually, business owners splurge a hefty amount of money on developing high-quality product videos, images, reviews, and other forms of content for their eCommerce websites. Well, DeFi solutions for eCommerce, without a doubt, offer proprietorship attributes. Using neoteric blockchain app development services, store owners can own all digital properties like product photos/videos, reviews, digital storefronts, and more. Their ownership is recorded on the blockchain and is completely immutable, secure, and transparent.
- Warranty administration and management
Dealers and customers are often agitated with the loss of paper receipts and the inability to claim or demonstrate warranty coverage. With DeFi solutions, merchants, suppliers, and consumers will all have access to data, thereby allowing easy access and confirmation of warranty details.
- Loyalty program management
Thanks to blockchain, users will be able to take advantage of custom-tailored loyalty incentive schemes and promotions. On the blockchain, purchasing history and preferences of customers are securely preserved. With DeFi-powered loyalty program management, granting incentive points or delivering a discount to customers when they meet pre-set purchasing thresholds is more secure and faster because all transactions are safely recorded on the chain.
Decentralized finance and online shopping seem like a bizarre combination at first. But after digging a little deeper, some compelling use cases and advantages of DeFi in the eCommerce sector emerge.
DeFi helps if offering immense safety, reliability, and transparency to business owners, and when it comes to cutting hefty transaction costs, it does so by removing middlemen in the process.
If you are looking for DeFi services or custom blockchain app development solutions, feel free to drop us a line, Our experts will get back to you within 24 hours.