Key takeaways:
- Solana Labs has launched Solana Pay, a new peer-to-peer (P2P) payments protocol with early backing from Circle, Checkout.com, and FTX
- Solana Pay brings near-instantaneous and low-cost transactions to the e-commerce space
- With over 14% gains, SOL outperformed all other coins in the cryptocurrency top 100 in the last 24 hours
Solana Pay enables merchants to accept crypto payments over the Solana network
Solana Labs, the creators and developers of the leading proof-of-stake (PoS) blockchain Solana, have launched Solana Pay, a new payments service that allows merchants and customers to use crypto as a payment method. Sheraz Shere, the head of Payments at Solana Labs, explains:
“The core premise behind Solana Pay is that the payment and underlying technology goes from being a necessary service utility to true peer-to-peer communication channel between the merchant and consumer.”
According to a recent study conducted by Visa, 59% of small businesses that participated in the research said they plan to shift to digital payments in entirety within the next two years, which showcases a high demand for a fast and easy to use payment platform.
Solana Pay enjoys early backing and adoption by USD Coin issuer Circle, Checkout.com, Phantom, FTX, and Slope. According to Solana’s announcement post, the company is aiming to usher “in a new era of payments and commerce,” where digital funds can move between users without middlemen “taxing every transaction.”
Although technically speaking, any Solana Program Library (SPL) token can be transferred via the new ‘Pay’ service, Solana and early backers are pushing for the proliferation of stablecoin transactions, namely the Solana-native USDC.
“The protocol provides a specification that allows the consumer to send digital dollar currencies, such as USDC, from their wallet directly into the merchant’s account, settling immediately with costs measured in fractions of a penny.”
Solana hopes to usher in the next generation of digital commerce
Solana’s PoS consensus mechanism coupled with a unique proof-of-history (PoH) timestamping algorithm allows the Web3 network to facilitate up to 65,000 transactions per second while on average charging well below a penny for a single transfer. The blockchain’s high transactional throughput and low costs will be instrumental to onboarding a large number of users to Solana Pay.
According to Shere, settling crypto transactions has been a thorn in the side of merchants that have been keen on accepting digital currencies as payments in the past. He believes that stable currencies in combination with Solana Pay’s near-instantaneous transfers will help drive the adoption of crypto and provide merchants with an opportunity to benefit from “cost savings, DeFi yield generation, zero fraud liability, and instant settlement.”
In the long term, Shere envisions a future where customers receive on-chain rewards for their loyalty and non-fungible tokens (NFTs) along with their physical purchases, thus taking full advantage of what Web3 has to offer.
The price of Solana’s native governance and utility token SOL has increased by more than 14% today and outperformed all other coins in the cryptocurrency top 100 in the last 24 hours.
