Blockchain and Bitcoin are Disrupting Payment Process

Blockchain. Cryptocurrencies. Bitcoin. These seem to be hot topics in today’s daily business news. It’s all still a bit of a mystery to most of us. It started with bitcoin (a cryptocurrency) in 2013, and the idea of a digital currency used to buy anything from music to cupcakes couldn’t have been more exciting, or timelier, as technology continues to advance at lightning speed.

How did blockchain grow?

When we think about earlier disruptive technologies, consider, for example, PayPal. It was brought to market during a time when consumers could not imagine money transfers outside of their bank accounts. It expanded rapidly from its inception in 2000 to 2005, when it became a widely adopted and trusted form of transferring money and making payments.

Blockchain is the platform used for verifying and recording transactions that are at the heart of bitcoin and is considered as having the potential to reshape the global financial system, among other industries.

So, how is artificial intelligence (AI) impacting accounts payable? Here are our views on this up-and-coming disruptive technology and how it might impact the AP process in a good way.

Is bitcoin a legitimate form of currency?

People and businesses are taking bitcoin seriously in its use as a cryptocurrency or investing in it. One year ago, bitcoin’s value opened at $702 and it closed today at $7,221, with a total value of $184 billion. That’s more than a 900% increase. And the value continues to rise daily.

Some are becoming wealthy with it. Fortune 500 companies like Microsoft and Intuit are starting to embrace bitcoin as a form of payment. The questions now become, how do we continue to measure the value of bitcoin in relation to money? And beyond that, how do we see it shaping the business world? Even our personal world?

And blockchain is a legitimate way of managing transactions?

Sure. More than 100 banks including Barclays Bank Plc and JPMorgan Chase & Co. have joined the R3 consortium, an operating system for financial markets with a ledger/ blockchain platform to track money transfers and other transactions. The use of blockchain by banks and other companies is secure with new forms of encryption that can keep transaction details private while allowing a network of users to verify them. Nasdaq Inc. is also using blockchain for trading securities in private companies.

How does it apply to the accounts payable process?

When you consider the procure to payment workflow specifically, an important part of the process is matching an invoice to the P.O. That can also be the step where delays or errors happen. With this platform, the records are all stored in the blockchain, and the provenance, authenticity and accuracy of these records are guaranteed. There would be no need to check an invoice against a P.O.

One day, it might even eliminate the need for an invoice. Blockchain can be a smart contract between trading partners and also help the financial operations team become more strategic. It can also connect vendors to buyers, and customers to business.

At Yooz, we’re already doing much of that with our cloud-based AP automation solution, helping companies evolve from a manual, paper-laden process to a digital, fully automated workflow. From there, going from digital to blockchain doesn’t seem like such a huge leap.

From a thought-leader viewpoint, what industries or companies will be the next big adopters?

It’s not just financial institutions. I read how Walmart is using blockchain to manage food safety in its supply chain. This indicates that any business with global shipping and logistics can benefit.

I project advertising and real estate will be two others. And of course, crowdfunding has become a popular way for small businesses, startups, and causes to fund a project or venture by raising many small amounts of money from a large number of people via the internet.

Entire processes can be tracked in one blockchain ledger. One day it may even replace a company’s books.

What problem do you think blockchain and cryptocurrencies like bitcoin solve?

I see the potential for a common global currency. Think about it. Now, when you are transferring money internationally, for example, you need a lot of information — the other party’s bank account information, exchange rates, data and fraud protection, etc. All of this is solved by blockchain. It can disrupt our reliance on traditional banks.

Would we even still need banks?

We are operating in a global economy bogged down by so many different types of currencies and bank regulations from country to country. This could streamline business transactions across nations. It’s fascinating to imagine what a new world bank would look like. Contact us for more information about blockchain.