Why Solana Pay is considered to be the next innovation in the payments processing arena.
Table of contents
- What is Solana Pay ?
- What is it?
- How does it Work ?
- How to Use it ?
- Which are the Supporting Wallets??
- How long does it take for a transaction to clear?
- Why are fees so low?
- Aside from transferring tokens, what else can a transaction do?
- Why are stablecoins important to it?
- Is it the future of payments?
What is Solana Pay ?
Solana is a smart contract decentralized finance (DeFi) platform essentially, competing with Ethereum.
Both platforms offer all sorts of decentralized finance DApps.
Essentially, some with their cryptocurrencies as well. Instead of Ether at the center of it all, the Solana token is SOL.
SOL is used to transact within the Solana network. Besides, to stake for governance purposes and is given as a reward to validators .
Additionally, Solana has its own decentralized exchanges to trade the various tokens built on top of its platform .
Every DApp built on Solana is sure to have its own SOL-compatible token. In addition, on-chain decentralized exchanges provide an accessible way to buy these tokens.
Solana was founded in 2017 by Anatoly Yakovenko . A Software engineer with a background at Dropbox and other big tech companies.
What is it?
Solana’s PoH consensus allows it to process tens of thousands of transactions per second without fees.
Solana Labs is building it to provide that transaction power to the masses.
While, Solana Labs were a big part of the development process , other companies were involved as well.
According to Shere, Circle ,Checkout.com , Citcon, Phantom , FTX and Slope all played a part in establishing the foundation .
Essentially, for a digital payment platform. Shere, joined Solare Labs in 2023 to work on it.
How does it Work ?
Additionally, digital payment platform offers businesses and customers immediate , fee-free transactions.
That allegedly have zero effect on the environment by harnessing the power of the Solana blockchain network.
The network claims to support 65,000 transactions per second . Also, it provides an easy-to-implement software development kit for businesses to integrate the product.
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How to Use it ?
Developers building DApps on Solana can integrate Solana Pay for easy transactions . Just as traditional retailers can implement it if they have a Solana wallet.
Moreover, this accessibility is why many more Solana to PayPal. essentially, stating that Solana can do for crypto payments what PayPal did for traditional online payments.
Ofcourse, Bitcoin , ETH and other cryptocurrencies claim to provide a near-instant crypto payment. But these networks (especially Ethereum) are costly and not as instant as they might claim.
For instance , Bitcoin features an average of seven transactions per second , while Ethereum averages 13 transactions per second .
Further, both Bitcoin and Ethereum are harmful to the environment as well. Solana’s network is faster and cheaper, which is attractive to businesses and customers.
Solana Pay allows its users to pay in real-time in SOL . Or any other supported Solana token.
Such as real-time payments in USD Coin. Without involving a third-party such as a bank or payments processor .
Moreover, Solana Pay does not allow for chargebacks , removing a costly issue that traditional merchants often face.
Also ideal for merchants , Solana Pay offers detailed reports on every transaction such as wallet destination.
Additionally, it offers details on transaction amount and text fields for the merchant to describe the said transaction .
Additionally, these details are kept entirely private from the rest of the network. Ensuring that both the customer and the merchant can transact without prying eyes.
firstly, Solana Pay, alongside the Solana network , itself, is in early stage of development .
Businesses who switch over to Solana Pay run the risk of programming error. Similarly, attack on the network .
For instance its possible to lose assets due to basic user errors if the business is not crypto -knowledgeable .
As managing a crypto wallet does not come naturally to everyone.
Also, with Solana is faster than many of its competitors. Ethereum has many more DApps and larger user base than Solana.
Ethereum’s eventual move to Ethereum 2.0 could prove problematic for Solana as well.
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Which are the Supporting Wallets??
Solana Pay is currently supported in three wallets : Phantom, Crypto Please and FTX .
Phantom is a Solana – only wallet for buying , holding and swapping crypto and NFTs.
Crypto Please is another Solana -focused wallet enabling you to send crypto over Telegram, Whatsapp and more.
More wallets that support Solana are coming soon.
How long does it take for a transaction to clear?
Unlike credit cards and wire transfers that can take days to settle, using Solana Pay is like transacting with digital cash — payments move in seconds with near-zero fees.
Why are fees so low?
Existing payments networks are built on legacy systems over half a century old and crowded with intermediaries.
Large merchants are able to negotiate lower transaction fees with networks like Visa, whereas your neighborhood small businesses suffer from higher fees.
With Solana Pay, everyone pays the same fraction-of-a-penny fee.
Aside from transferring tokens, what else can a transaction do?
When a customer buys something, it’s a vote of support. Typically, only large merchants have the resources to design sophisticated loyalty programs.
With Solana Pay, the opportunities to reward customers are limitless — embed loyalty, offers, and payment all in one transaction.
Any merchant can create and operate a world class loyalty program.
Why are stablecoins important to it?
Using Solana Pay doesn’t mean you must exchange volatile cryptocurrencies — any token that runs on the Solana blockchain works.
For example, USDC is a fully-collateralized stablecoin, meaning that for every $1 of USDC there’s $1 US dollar sitting in a bank account.
So, the value of USDC is always the same.
Is it the future of payments?
The early implementations of Solana Pay demonstrate how easy it is to get started.
And while a primary advantage of Solana Pay is the lack of intermediaries and near-zero fees, the future of payments has so much more in store.
It debuted as the first decentralized permissionless payments rail, making it easy for merchants to enable transactions in digital dollars, like USDC.
For a fraction of a penny and without intermediaries at the point of sale.
More than 600 merchants have engaged with the Solana Pay ecosystem while others in the community are already incorporating Solana Pay into their payment flows.
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Solana is currently consolidating , but it is on track to meet the expectations of both retail & institutional investors.
Experts from Trader Union think that the price of SOL coins will have been $91.11 by 2025.
However, if the coin value falls future price changes may be challenging for SOL investors.
The current circulating Solana is $375.27 M .
Solana Pay is a digital payment platform built on the Solana blockchain. It allows businesses and customers to engage in seamless transactions that are instant and without fees.
The platform also does not affect the environment because of its low energy usage , unlike Bitcoin.
The payment protocol built on the Solana blockchain,is now plugged into e-commerce giant Shopify,allowing users to pay in USD Coin (USDC) .
Phantom Wallet is the best overall wallet for the Solana ecosystem and has the most users compared to alternatives. They offer a seamless onboarding and user experience to buy, sell, stake and swap SOL tokens and NFTs on the emerging Layer 1.
Yes, use your mobile Solana wallet on iOS and Android.
Once you have copied your SOL address,from your Coinbase account,head back to your Phantom wallet and click send. You will enter the Coinbase address as the recipient before deciding the amount to transfer ,click next. Review your transaction to confirm that the wallet address and amount are correct.