Could Blockchain Payment Systems First Gain Adoption In "UnderDeveloped" Countries?
Although advancements in blockchain payment systems are rapidly advancing, the mass adoption blockchain payments could be awhile down the road.
Even with the clear and tremendous advantages that many digital payment systems offer, they have yet to gain serious traction as a means of currency. Interest in Bitcoin is higher than ever, but even bitcoin still has a long way to go before it can compete with the convenience of traditional payment systems. The reason that this adoption will likely be slow and lengthy is because these new and improved payment systems seek to replace an existing system. The advantages required to offer adequate incentive to users to convince them to switch are abundant, but even with all these advantages there is still a lacking convenience that holds back the adoption. There are numerous examples and reasons why the adoption of new technology has a greater chance of adoption within underdeveloped nations. In addition to all of the advantages that blockchain payment systems offer for the people in these countries, there is a much greater chance of adoption by these individuals compared to individuals in the US and Europe.
The reasoning behind the idea that underdeveloped regions are prime for adoption is because rather than replacing a system, it's introducing a system.
When we look at the technology advancements that have been able to occur over the last 20 years in the developing world, we can see that they have "jumped" numerous levels of technology. By this I mean that rather than making a switch from home phones to cell phones, most of these individuals were first introduced to mobile phones. This may seem like an exaggerated example because of the advantages cell phones offer for these individuals, but the concept of introducing technology when it's new is much more successful than replacing an existing system. If individuals have never had any access with the financial system, then they will have a much greater need and desire for these types of digital payment systems. The extensive existing financial infrastructure and tools for many individuals in the developed world has made many individuals "comfortable" with their current financial infrastructure, which in turn makes the incentives offered by digital payments overshadowed by the lack of convenience.
The acceptance of digital payments are evident through the example of M-Pesa, but the M-Pesa system doesn't contain the scalability required to reach globally. The fact that M-Pesa really proves is that individuals who have never had access to any financial system are more than willing to implement digital payment systems. Instead of individuals in these regions implementing credit cards, or even bank accounts, it is a prime environment for the adoption of digital payment systems. These individuals have been left out of the financial system because of the lack of incentive for banking systems and services to service them, which leaves these individuals with little options. The current lack of regulations have made these individuals hard to service for many digital payment companies and services so far. These are numerous systems that have had success, but most of the systems that have had great success are successful within a specific country or region, and are able to service a relatively small portion of the individuals who need this type of system.
Individuals in these countries will be more accepting of digital payments compared to others, but the system still needs to have the ability to reach them.
Digital payment systems are highly effective and beneficial to individuals living in these countries, but for the systems to reach long term success it must be available to a large portion of people globally. These individual's financial services needs differ from others around the world greatly, but specifically in terms of the ability to transact micropayments and a very low fee structure. The incentive for any major financial institution to service these individuals is absent simply because these are not the types of customers that traditional financial institutions wish to service. The costs are simply too high for too little of a reward for traditional services, and that's where blockchain technology's advantages really become pronounced. Digital blockchain payment systems allow for individuals to transact faster, easier, and safer all through their mobile phones, which eliminates the need for the service to invest heavily in building infrastructure to service these individuals.
In 2016 over 4.6 billion individuals owned mobile phones globally, and is expected to continue to rise for the foreseeable future.
Although only half of these phones are considered Smart Phones, this still shows a large portion of individuals have access to mobile phones. While many individuals who own smart phones often simply download a wallet application for access to digital payments, it has been shown that systems and applications can be created to facilitate payments through even the most elementary mobile devices. A blockchain based system containing elements of basic financial functions such as, savings, sending money, and receiving money from others could bring a much needed financial infrastructure to many individuals. Something as small as a savings account can be essential in helping these individuals have the resources to attempt to improve their financial status. The barrier for these individuals to reach the traditional financial services often makes it impossible to have access to these services.
In the US and Europe many people are "spoiled" if you will in terms of financial access, and often loose sight on what their financial solutions would be without these solutions. If individuals within the US faced a very high barrier to entry into the banking system, let's imagine all accounts were forced to maintain a balance of $100,000, then the adoption of Bitcoin within the US would likely have been much greater. The less financial access individuals have to traditional financial institutions, the greater their desire and need for blockchain digital payment systems.