“With a digital asset, payment is settlement, and the cryptographic keys and digital ownership they control can lower post-trade latency and counterparty risk.”The current process for clearing and settlement of payments is wasteful. As a consumer, we imagine the process of paying for something a little bit like this: A payer swipes their card and computers instantly transfer the money from their account to the payee’s account.Unfortunately, there is a whole lot more that takes place in the background. Introducing the middlemen.The role of middlemen in settlements and clearingMaking a transaction using a credit card, on its own, is no more than a promise to pay. Behind the scenes, the process is more elaborate, involving at least two banks and an extensive amount of other people (each of whom must take a cut).These middlemen exist for two reasons: trust & securityTrust: Ensure there are sufficient funds to make payment. Ensure funds are subtracted from the payer’s account. Ensure funds are added to the payee’s account. Protect the payer in the event that they don’t receive the goods/services promised to them. These are often considered counterparty risk, or the risk that the other party won’t deliver their side of the deal.Security: Ensure the payer is who they claim to be (by the security features on the card). Protect the payer in the event of fraud.This process can take as many as 14 independent steps and the time frame for clearing and settlement of a transaction is generally referred to as ‘T+3’ — that is, three days after the trade (T), the transaction is settled. However, some transactions involve so much friction that they can take weeks to settle.How Clearing & Settlement for Financial Transactions Currently WorkEliminating the steps in the middle has been all but a fantasy… until the advent of blockchain.How GoChain can improve settlements and paymentsWith GoChain’s advanced technology, the entire lifecycle of a transaction — authorization, clearing and settlement — occurs immediately. With a digital asset, transaction is settlement, and the cryptographic keys and digital ownership they control provide trust & security without all of the added steps.Accenture has recently estimated that the global financial industry could save up to $10 billion by using blockchain to store and process clearing and settlement.This reduces friction and costs for all parties. The entire process is streamlined into a six simple steps that require not three days, but five seconds to complete.How Clearing & Settlement works using GoChain’s blockchain protocolWith GoChain’s high-speed network, enterprises immediately benefit from:Nearly immediate transaction settlement in just five secondsHuge cost savings: In 2016, VISA reported that they process an average of 150 million transactions per day. At a average cost of $0.00003 per transaction, GoChain’s network can process the same number of transactions as VISA for less than $160 a dayIncreased audibility and transparencyAdoption by enterprises has already begunIn 2017, Barclays placed themselves at the forefront of adoption by implementing the security and transparency aspects of blockchain technology into their transaction processes. The multinational bank did so by announcing a first of its kind, blockchain-backed credit transaction between Ornua and Seychelles Trading Company.It included the first trade documentation to be encrypted and managed on a blockchain network. The use of a decentralized ledger to store and send the documents saved the bank significant time and money on the transaction, a far cry from the costly ten-day process it would have taken Barclays via traditional channels.Want to save potentially billions?The world of finance is evolving, and GoChain is leading the way with blockchain. We know that when implemented correctly, blockchain can help businesses improve efficiency, cut costs, and increase revenue by creating new products and services. However many enterprises are struggling to implement the technology correctly simply because they don’t fully understand it. GoChain’s core team of expert engineers and business professionals are dedicated to working with enterprise companies and mid-level businesses to build custom blockchain solutions. Whether your business needs general consulting, professional education, or project architecture and implementation, GoChain will be your partner and help you and your team reach all of your milestones. Let our team of experienced blockchain professionals and consultants meet with you to discuss your desired business outcomes.