Solana Pay: Visa and Mastercard competitor in the Web3 world
Solana Labs launches Solana Pay, a peer-to-peer payment protocol that allows merchants to easily and instantly accept payments in SOL, Solana's native cryptocurrency, USD Coin (USDC), and other tokens utilizing the Solana blockchain.
Solana Pay aims to be the next innovation in payment processing, similar to the VISA, Mastercard, PayPal, or Stripe networks. It facilitates payments by taking into account non-fiat tokens (NFTs) and Web3.
Merchants using Solana Pay will incur lower transaction costs due to relatively low transaction fees on the SOL blockchain.
Solana's POS system allows physical businesses, such as restaurants or even boutiques, to accept cryptocurrency payments for "fractions of a cent."
Solana Pay is the result of a collaboration between Solana Labs, Checkout.com, Circle and Citcon. It was developed by integrating Phantom crypto wallets, FTX and Slope exchange, a decentralized exchange platform and a wallet built on Solana. There are also plans to integrate Solana Pay with Shopify to allow merchants using the e-commerce platform to easily accept cryptocurrencies. This accessibility allows Solana to offer crypto payments in much the same way PayPal did in the early 2000s.
Sheraza Shere, head of payments at Solana Labs, when asked "whether Solana Pay wants to compete with e-payment giants like Mastercard and Visa," said that Solana's payment solution is more aimed at: "change the entire payments paradigm so that merchants gain control by creating decentralized, permissionless and P2P [peer-to-peer] gateways and providing a new Web3 commerce experience."
Solana Pay allows its users to make real-time payments in SOL or any other supported Solana tokens (SPL tokens), such as USD Coin (USDC), without involving a third party such as a bank or payment processor. Furthermore, Solana Pay does not support reverse payments, eliminating a costly problem that merchants often face.
Solana's blockchain is popular in the cryptosphere in part due to its high transaction speeds and relatively low transaction fees. Solana Pay will further develop the SOL ecosystem and will likely bring new entrants into the new financial sphere. However, Solana needs to address recurring network congestion issues so that the project does not become a victim of its own success.