Cognitive Awareness Awakening
Launching on the high-performance blockchain Solana, currently ranked second in market value, PYUSD aims to reach the most active and engaged users in the crypto ecosystem, letting the world know that “PYUSD has truly arrived.”
Additionally, the integration of PYUSD with the PayPal and Venmo applications will introduce it to over 100 million American users. Moving forward, there will be continuous efforts to expand PYUSD’s influence beyond the PayPal ecosystem through collaborations with crypto exchanges and payment partners.
PayPal has learned from past successful experiences that achieving a cognitive awakening is the necessary first step in introducing a new payment mechanism to the masses.
4.2 Utility Through Integration
The next step after adopting new payment technology is to realize its utility, transforming the initial cognitive awakening into practical payment utility, much like how PayPal, in its early days, established itself as a trusted platform for transactions between strangers through eBay.
Today, people require payments that are fast and cost-effective. While launching PYUSD on the Ethereum mainnet provided significant visibility, it did not fully meet all the standards required for PYUSD to fulfill its mission as a digital commercial payment tool – efficient, economical, and globally accessible.
Therefore, PYUSD has turned to Solana to achieve payment utility.
Solana, a high-performance blockchain network built for finance, payments, loyalty programs, among others, is one of the most widely adopted blockchains. By the fourth quarter of 2023, it was processing an average of 40.7 million transactions per day with 2,500 active developers in its ecosystem. Furthermore, its blockchain’s open-source, programmable, and composable nature brings significant scalability and network effects.
Solana provides PYUSD with faster settlement speeds, lower transaction costs, stronger scalability, and global network support compared to other blockchains. Leveraging Solana’s advantages, users can truly experience payment utility when using PYUSD:
– Real-time settlement: Most PYUSD transactions settle efficiently within seconds.
– Low transaction costs: Transaction costs on the Solana chain are only a few cents, regardless of the transaction amount.
– Transaction finality: Merchants do not have to worry about payments being canceled due to insufficient funds or other reasons.
– 24/7/365 trading: Available round the clock, all year round.
– Interoperability: PYUSD can be used outside the PayPal ecosystem, enabling interoperability with other gateways, networks, and wallets.
– Programmability and composability: Developed on the widely adopted SPL token standard, PYUSD automatically gains support from any product that supports the standard. Developers have the freedom to experiment and build both within and outside the PayPal ecosystem. Consumers, merchants, and institutions can enjoy a wide range of third-party developer experiences, utilizing PYUSD for payment and financial use cases.
– PayPal’s vast user base: PYUSD is available to existing eligible US PayPal customers.
Thus, launching PYUSD on Solana will help drive the long-term adoption of stablecoin payments, transitioning PYUSD from the cognitive awakening phase to the actual payment utility phase.
With PYUSD live on both Ethereum and Solana, more developers and ecosystem partners will join in. Combined with the practicality on PayPal and Venmo applications, PYUSD will offer users more feasible and user-friendly use cases.
Ubiquity Through Assimilation
The final stage of adopting any new payment technology is ubiquity, seamlessly integrating the technology into daily life. In this stage, people can effortlessly use the new payment technology without even realizing it – they are simply paying as they please.
For PayPal, digital payments have become a way for people and businesses in over 200 countries to transfer money securely, reliably, and standardized through P2P, B2B, and B2C payments as part of the digital globalization.
PYUSD Stablecoin Payment Use Cases on Solana
Turning dreams into reality and allowing people to pay as they please requires more than slogans. Let’s take a look at some real-life scenarios for PYUSD.
Cross-Border P2P Remittances (P2P)
In today’s globalized world, economic connections between individuals are tighter than ever before. However, cross-border money transfers between individuals represent a vast and growing market full of opportunities. Legal remittances to low- and middle-income countries reached a volume of $669 billion in 2023 (World Bank data), but cross-border remittances are not cheap.
With PYUSD, payers can transfer funds directly to recipients using a Solana wallet, settling transfers almost immediately and at near-zero cost.
Even for recipients without a Solana wallet, payers can collaborate with PYUSD payment service providers to save costs on cross-border remittances. Payment service providers connect local partner banks through PYUSD to the fiat cash network, allowing recipients to easily convert PYUSD into bank deposits or cash, enjoying near-instant, low-cost global transfer services.
B2B Transfers
Due to the complexity of cross-border payments involving multiple intermediaries and cross-national agent bank networks, most B2B payments may take several days to settle. Additionally, depending on the method of cross-border fund transfer, payment fees can be high.
By leveraging the programmable features of PYUSD, businesses can build their own services, seamlessly creating near-instant, cost-effective cross-border transfer methods with relatively low technical requirements. Teams can also create smart contracts to manage the flow of PYUSD between accounts, enhancing the speed and accuracy of supplier payments (or any other B2B payments governed by contract agreements).
Furthermore, utilizing PYUSD transfers does not necessarily require businesses to own or interact directly with PYUSD. Payment service providers can build B2B payment products, offering end-users a fiat currency experience.
Global B2C Payments
PYUSD can significantly simplify global payments. PYUSD does not need to traverse complex networks (including unique regional bank accounts, different currencies, agent banks, and digital wallet tracks) but can be sent to any compatible wallet address. Additionally, using PYUSD’s programmable smart contracts can enable business payers to automate payment processes more effectively, even facilitating real-time wage payments.
Microtransactions
Due to high transaction costs, traditional payment processing systems struggle to support microtransactions. Therefore, platforms handling microtransactions often batch payments, involving complex payment engineering, increasing risks, and hindering platforms from accepting microtransactions.
However, PYUSD on Solana will enable merchant platforms to easily process microtransactions in near-real-time and cost-effective ways. Microtransactions support various use cases such as tips, in-game purchases, and paying content creators based on reads or views.
Web3 Payments
Many Web3 businesses (such as NFT markets and blockchain-based gaming platforms) lack connections to traditional fiat bank accounts, requiring robust, non-custodial payment solutions, which PYUSD + PayPal can provide.
In Conclusion
Jose Fernandez da Ponte, Senior Vice President of PayPal’s Blockchain, Cryptocurrency, and Digital Currencies Group, stated, “The creation of PayPal USD is aimed at providing a fast, simple, and cost-effective payment method for the next wave of digital economy development, once again revolutionizing commerce. Launching PYUSD on the Solana blockchain further realizes our goal of creating a stable-value digital currency designed specifically for business and payments.”
Since the launch of PYUSD on Ethereum, it has been operating steadily, mainly within the PayPal Super App. With its launch on Solana, whether it aims to break free from constraints or delve further into exploration, one thing is certain – a killer app of Web3 may have arrived, and that is payments!
As we discussed in the Web3 Payments Research Report, the greatest opportunity with cryptocurrencies may not be viewing them as cryptocurrencies but as a new set of payment methods.
Payments play a crucial role in bridging the gap between the crypto system on-chain and the fiat system off-chain. Through tokenization transformation with blockchain technology, the traditional monetary system gains new value, overcoming previously insurmountable boundaries, potentially leading to permanent changes in the world economy.
Original Article: (link)
