- Solana has announced the launch of Solana Pay, a new set of decentralized payments standards and protocols to enable merchants to get paid on the Solana blockchain.
- It has partnered with Circle and Checkout.com on the project which will allow instant settlement with the USDC and SOL at near-zero cost.
Satoshi Nakamoto introduced Bitcoin as peer-to-peer electronic cash for the Internet. However, BTC has failed to live up to the promise and with its small blocks and high fees, it’s remained unsuitable for payments. Solana wants to take on the mantle and fulfill Satoshi’s ambitious vision from over a decade ago, but in a different way from Bitcoin. The project has launched Solana Pay, a set of decentralized payment standards and protocols that it hopes will be the missing piece of the blockchain payments puzzle for merchants.
Solana announced Solana Pay yesterday, February 1, describing it as “a decentralized, secure, and open-source payments protocol for the next generation of merchant payments.”
1/ Introducing Solana Pay, a decentralized, secure, and open-source payments protocol for the next generation of merchant payments 💸#SolanaPay https://t.co/mI2hMIh79G
— Solana (@solana) February 1, 2022
In an accompanying blog post, Sherez Shere, the head of payments at Solana Labs said she believes that Solana Pay will usher in a new era of payments and commerce.
Our team helped create the building blocks for a decentralized, open and truly peer-to-peer payment protocol. We believe this will pave the way for a future where digital currencies are prevalent and digital money moves through the internet like data – uncensored and without intermediaries taxing every transaction.
Before joining Solana Labs last year, Shere held roles at American Express and later at Google where he played a key role in the launch of Google Pay. Despite working for two of the biggest companies in tech and finance, he still believes that the promise of simple, seamless, and connected payments hasn’t materialized yet. Solana pay will finally make it happen, he says.
Will Solana Pay crack through in the $500B payments market?
At the heart of Solana Pay is the promise of a “true peer-to-peer communication channel between the merchant and consumer.”
While the fundamental solution remains to enable seamless payments, it will offer much more than just a payment rail. Shere claims that Solana Pay will allow merchants an opportunity to leverage deep engagement with their customers on a blockchain protocol that will embed “loyalty, offers and rewards in the same messaging scheme and become true building blocks for the future of commerce.”
The project is betting on the use of USDC, a stablecoin that has become the second-biggest in the market after Tether, with a $50 billion market cap. Currently, there’s $4 billion worth of USDC deployed on Solana, the second-highest of any chain after Ethereum. Solana believes that merchants, and their customers, will seek to make payments in the stablecoins as it’s not prone to price volatility as other cryptos are.
Those who choose to pay in SOL or the other Solana Program Library tokens like Serum can also do so through Solana Pay.
Shere commented:
Merchants should benefit from all of the advantages that on-chain decentralized payments can provide, such as network cost savings, DeFi yield generation, zero fraud liability, instant settlement, and ownership of the customer relationship.
Solana has partnered with Circle – the makers of USDC – Checkout.com, mobile payments firm Citcon, Sam Bankman-Fried’s FTX exchange and others on the project.
In his comments on the partnership, Circle CEO and founder Jeremy Allaire stated:
The launch of Solana Pay is a critical step toward broadening access and usage for merchants and customers who want a faster, more efficient payment option for everyday commerce.
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