FedNow Adopts DLT Micropayment Partner for Retail Transactions on Hedera
The collaboration between FedNow and Dropp has garnered mixed reactions from the crypto community.
The United States Federal Reserve’s instant payment system FedNow has added support for Dropp, a cutting-edge payment application based on the Hedera Hashgraph (HBAR) Network. The company, which uses advanced blockchain technology to expedite payment processes and enhance financial transactions, has now joined a growing list of payment providers for the FedNow service.
The FedNow payment platform was officially launched in July to connect financial institutions and businesses with innovative service providers for instant transactions.
On August 14, the Federal Reserve’s payment platform added Dropp to the showcase section of its website as one of its partners. Through this partnership with the duo, Dropp will be able to continue its services of empowering merchants to receive payments from consumers without incurring substantial transaction fees.
Dropp Accepts Both Crypto and Fiat Payments
As a micropayment processor, Dropp accepts both crypto and fiat currencies for payments. With the addition of the platform in FedNow’s showcase section, users can pay for services using various crypto assets, including HBAR, the native crypto of the distributed ledger technology (DLT) Hedera.
Dropp’s approach represents a shift away from the traditional subscription model. Unlike conventional content subscription plans, the company enables customers to pay only for the content they consume, offering greater flexibility and cost efficiency.
Although FedNow’s inclusion of the payment processor seemed like an embrace of DLT technology, the central bank warned that the materials presented on its website serve as a convenient reference for potential FedNow service participants.
The Federal Reserve Financial Services (FRFS) emphasized that its role is restricted to hosting applications in the showcase section of the FedNow platform. Adding that it neither supports nor endorses any particular showcase provider.
“Federal Reserve Financial Services (FRFS) is merely the host of the showcase and does not support or endorse any showcase providers, and the inclusion or exclusion of a provider should in no way imply any recommendation or endorsement by FRFS,” FedNow wrote.
Not the First Payment System Adopted by FedNow
While Dropp is not the first payment processor adopted by FedNow to execute retail transactions, the platform has demonstrated a pattern of removing payment providers days after being added to the platform.
Earlier this year, certain blockchain networks announced partnerships with FedNow but were subsequently removed from the platform. Another crypto company, Metal Blockchain, declared its interest in May to integrate with FedNow but was removed from the showcase after a short period.
Meanwhile, the collaboration between FedNow and Dropp has garnered mixed reactions from the crypto community. Some community members expressed concern that adopting blockchain technology might compromise the original principles of cryptocurrencies as an alternative to traditional financial systems.
A Reddit user lamented that while people might be pursuing better financial situations, it should not come at the expense of compromising the principles of fairness and transparency.
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Chimamanda is a crypto enthusiast and experienced writer focusing on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed an interest in the emerging economy. She combines her passion for blockchain technology with her love for travel and food, bringing a fresh and engaging perspective to her work.
