Innovation is tackling an old problem in a new and better way. Break it down, the three most obvious DeFi use cases in payment are: international money transfer, streaming payment and bank the unbanked.

International Money Transfer

If you have tried to send money to someone or business in a different country, you will certainly understand the pain involved. Both time and money. First, you need to obtain bank information from the beneficiary, fill out a lengthy form either online or offline. Second, as a sender, you will incur two costs: 1) the exchange rate 2) outbound fee when initiating the transfer. Then you wait, normally 1 – 3 business days, give it or take. Finally, when the money arrives, the receiver will incur an inbound charge.

DeFi makes international money transfer simpler, faster and cheaper. Simpler: No more SWIFT code/BIC, bank account number and routing number. All you need is a wallet address. Faster: processed [on chain], money transfer happens instantly. Cheaper: By removing the intermediaries and all the costs associated with maintaining a traditional centralized clearance system, the transaction cost is close to nil compare to what incurred in a traditional banking system. There are many blockchain projects focus on international money transfer. Most known ones include Circle and Stellar.

Streaming Payment

I often miss my childhood when my parents were my bank. I never need to worry about living expenses, meeting bills or running out of cash. As an adult human being, we all need to do our own cash flow management. And because incomes often come in chucks at different timing, same as expenses, we can get into tricky situations when these two don’t match. Streaming money can help smooth out cashflow and reduce likelihood of liquidity issues.

How does it work? Digital currency is programmable money, in other words, it is data. Just like we can stream data, we can stream money. Implication of streaming payments:

Pay as you go For consumers, subscription will become a thing in the past. If I have to put a number on how much content I actually consume with my Netflix subscription, I incline to say less than 10%. The number probably is even lower with my Spotify subscription. As money can be divided into incredibly small pieces just like data, I will be able to pay for the exact amount of data I consumed. For business owners, no more month-end stress as all operating expenses can be streamed and payed on the go.

Pay as you earn It is good and bad news. The payday excitement will become a thing in the past. Earners will be able to access their income as they provide the services. So if you feel itchy about the latest Apple Watch or the new dress for the season, you don’t have to wait until the payday! London-based startup Wagestream is exploiting the blockchain technology to deliver “pay as you earn”.

Bank the Unbanked

The massive social impact of blockchain technology is often covered by the overnight millionaire stories featured by all media outlet. So I feel a need to advocate for blockchain-based NGO projects that bring the greater good to the less privileged. The payment project I’d like to share is Celo.

Celo is a purpose-driven project that aims to bring prosperity to all. Its mission is to shake up all the bad stigmas associated with the current financial system and create a new, decentralised financial system that is inclusive and creates the conditions for all to thrive. “Celo”, means purpose in Esperanto.

Celo Blockchain has shared ancestry with Ethereum. However, Celo Blockchain is a completely different blockchain and protocol. Everything around Celo technology is centered around: lightweight, simple and accessibility.

Celo’s DAppkit is super lightweight and allow mobile DApps to work with the Celo Wallet to sign transactions and access user accounts. Celo provides plenty of tutorials and examples to make the development experience as easy as possible. DAppkit is made with mobile apps in mind but supports web apps now as well.

Like Terra Luna, Celo also aims to create a stable financial ecosystem and hence stablecoins. The first stablecoin that will come to Celo is USD. Celo uses its ecosystem token CELO to regulate the value of USD on Celo Blockchain, much like what Luna does to UST.