Huma Finance pilots blockchain to modernise real-time payments

The initiative aims to reduce the delays and costs associated with traditional merchant payment processing.

Traditional payment infrastructures often require merchants to wait days or even weeks for transaction settlements, relying on intermediaries such as banks and clearinghouses. These processes not only delay access to funds but also increase operational costs for businesses. By leveraging blockchain’s decentralized architecture, Huma Finance’s pilot program offers a more efficient alternative, enabling real-time payment settlements without the need for third-party validation.

The blockchain-powered system is designed to validate and settle transactions instantly. Payments are verified on the blockchain network and transferred directly to merchants’ accounts, improving cash flow and reducing liquidity risks. The absence of intermediaries simplifies operations, minimises transaction fees, and increases transparency across the settlement process.

Huma Finance’s collaboration with Visa strengthens the pilot program by combining Visa’s global payments expertise with Huma’s blockchain capabilities.

Regulatory and integration challenges

Despite blockchain’s promise of faster, cheaper payments, scalability remains a significant hurdle for widespread adoption. Public blockchains, particularly Ethereum and Bitcoin, have faced congestion and high transaction fees during periods of high demand. While newer blockchains like Solana have reduced costs to a fraction of a cent per transaction, their long-term scalability at global transaction volumes remains unproven. According to a 2023 report from Chainalysis, while Solana can process over 65,000 transactions per second (TPS), Ethereum processes just 15-30 TPS, highlighting the need for scaling solutions to accommodate larger transaction volumes without compromising speed or cost-efficiency.

Blockchain payments must also navigate complex regulatory landscapes, particularly around KYC/AML compliance. While cryptocurrencies like Bitcoin operate in a relatively unregulated space, institutions like banks and payment processors require solutions that adhere to legal frameworks in various jurisdictions. Furthermore, blockchain systems must integrate with existing financial infrastructure, which is often not designed to support decentralized networks.