The traditional e-commerce industry is not deprived of challenges. From sourcing raw material to complex supply chains, finding customers, and ensuring secure and low-cost payments, the entire process is full of problems. One of the biggest challenges of the e-commerce market is the need to trust multiple intermediaries or middlemen, which both increases costs and reduces privacy.
The Libra Ecosystem, which proposes the inclusion of blockchain technology in e-commerce, can be a potential solution to many of the e-commerce industry problems.
Let’s first discuss the variety of challenges in E-commerce.
E-commerce industry problems & challenges
Inefficient payments: Payments from vendors to suppliers and customers to sellers are all complex and involve high waiting times. Then there are complexities such as taxation, billing, invoicing, and more. Moreover, the need for middlemen to approve every transaction further increases the payment timeline and increases costs for end consumers.
Lack of transparency: Another major problem with traditional e-commerce is the lack of transparency in everything from product supply chain to payments. This results in counterfeit products that are no good for consumers and are usually returned, leading to lost sales and profit for sellers.
Tedious and costly payments: One of the biggest challenges of e-commerce is the payment process, which involves many intermediaries and is both complex and costly. Moreover, there is always the risk of errors or delays in processing because of human factors.
Libra Ecosystem solution to e-commerce problems
The use of blockchain technology in e-commerce can help solve many, if not all, of the industry problems. The Libra ecosystem is a good example of that.
Blockchain can be used for streamlining e-commerce business processes like supplier management, delivery and payments. Moreover, the use of blockchain will result in lower operational costs for online businesses and will also help customers save on transaction charges. (Fee per transaction on the blockchain is very low compared to traditional payment methods.)
Blockchain processes transactions, including payments, autonomously and without human involvement. Moreover, all transaction records and user data are stored on a distributed ledger system that is both very secure and transparent (publicly available). This can help bring transparency to the e-commerce supply chain. For instance, consumers will be able to see how or where a product is made and what ingredients are used in it. The immutable nature of blockchain makes it impossible to manipulate transactions, avoiding risks such as hacks or fraud.
Also, blockchain reduces the need for middlemen in e-commerce transactions. Libra’s smart contracts can handle all kinds of transactions from peer-to-peer sales, money transfer, payment, order status tracking, user data management, and more. This will further help reduce operation costs for e-commerce businesses and increase the security and privacy of users.
Overall, the inclusion of blockchain-based Libra coin can help simplify the entire process of payments in e-commerce and increase efficiency. This will result in an improved customer experience. Here are some other benefits that Libra’s blockchain system can offer to e-commerce:
- Faster payments using next-gen cryptocurrencies including the Libra coin.
- Pay or receive payments to/from anywhere in the world.
- High security and credibility of blockchain.
- High authenticity with little chance of fraud or counterfeit products.
- Increased overall efficiency in the supply chain.