In a rapidly evolving world of digital finance, merchants are increasingly looking for more cost-efficientpayment solutions to streamline transactions and improve financial outcomes. Traditional payment gateways, with long settlement times, high processing fees and centralized control, no longer meet the needs of today’s businesses needs.. Enter PolyFlow — an innovative payment gateway leveraging stablecoin payment rails to enable merchants with real-time settlements, low processing fees and self-custody solutions without the baggage of centralized systems.

This case study illustrates how PolyFlow simplifies the merchant payment experience with its decentralized payment architecture by walking through a real-world example of purchasing $200 worth of PlayStation gift cards. Let’s dive in!

The Transaction Flow

1. The Purchase: The buyer intends to purchase $200 worth of PlayStation Credits from a merchant using a PolyFlow enabled payment gateway.
2. QR Code Payment: Upon checkout, the PolyFlow-enabled payment gateway generates a QR code for payment. The buyer scans the code and initiates the payment using 200 USDT (Tether) from their crypto wallet.
3. Smart Contract Execution: The buyer’s USDT is transferred directly to a smart contract address managed by the PolyFlow Liquidity Pool (PLP) via the QR code.
4. pfUSDT Given: Once received, the PLP automatically generates an equivalent token called pfUSDT, pegged 1:1 to the USDT paid and deposited to the merchant’s PolyFlow account.
5. Merchant Redemption: Merchants can choose to redeem their pfUSDT for USDT at anytime, or leave the pfUSDT in the PLP to generate yield. USDT, once redeemed, will be transferred to the merchants’ own wallet and the corresponding pfUSDT will be burned.

This seamless process is entirely governed by smart contracts and eliminates the need for any central third party to hold or process the funds.

Self-Custody and Instant Settlements

A key feature of PolyFlow’s system is self-custody. Unlike traditional payment processors such as Amazon or centralized gateways, where settlement times range from days to weeks, merchants using PolyFlow have full custody of their funds. This enables them to:

• Redeem instantly: Merchants can redeem pfUSDT for USDT anytime with just a small processing fee.
• Self-Custody for Yields: Alternatively, they can choose to leave the pfUSDT in the PLP to generate yield through PolyFlow protocol. The yield will be rebased upon each transaction, bringing additional benefit to the merchants, making every transaction count.

When a merchant redeems pfUSDT for USDT, the corresponding pfUSDT is burned, ensuring proper token management and liquidity tracking.

Yield Generation: A Game-Changer for Merchants

Traditional payment processors charge a large portion of bundled fees to process transactions and utilize merchants’ funds for liquidity while generating yield for themselves, leaving merchants uncompensated. PolyFlow disrupts this model by allowing merchants to earn yield on the pfUSDT tokens in their accounts. This yield is derived from payment processing fees and is credited directly to the merchant, effectively compensating them for providing liquidity.

Merchants can hold pfUSDT and accrue yield while maintaining complete control over their funds. In this model, PolyFlow aligns incentives between merchants and the payment gateway, fostering a more equitable financial environment.

The reason coffee shops around the corner accept credit card payments is solely for convenience. However, they are charged for a $5 coffee with $0.30 processing fee and services they barely use. With PolyFlow, this $5 dollar goes directly to coffee shops’ accounts and with the potential to generate yield upon every transaction.

Identity Management with Payment IDs (PIDs)

Security and regulatory compliance are critical in any payment system, especially within the crypto industry. PolyFlow ensures both through the use of Payment IDs (PIDs). Every participant in the PolyFlow ecosystem is required to have a unique PID, which can be associated with:

• KYC (Know Your Customer) information
• Credit history and payment records

This ensures that transactions are not only decentralized but also secure and compliant with financial regulations. The PID system adds an additional layer of trust for both merchants and buyers.

Based on PID and inherited records, future scenarios involving, merchants can apply for operation funding to boost sales or solve liquidity needs, while buyers can opt to buy now pay later/never consumer service in building.

Refunds: Reversing the Flow

Refunds in the PolyFlow system are as seamless as payments. The process is simply the reverse:

1. The merchant initiates a refund of the corresponding pfUSDT.
2. PolyFlow’s smart contracts burn the refunded pfUSDT.
3. The USDT is returned to the buyer’s wallet directly from the PolyFlow Liquidity Pool.

This process is quick, efficient, and completely decentralized without any centralized controls and manual reconciliation.

Advantages of PolyFlow’s Decentralized Payment Gateway Model

PolyFlow’s decentralized payment gateway offers several unique advantages over traditional systems:

1. Instantaneous Settlement: Payments are settled instantly within the protocol, and merchants can redeem their funds instantly without waiting for days or weeks.
2. Self-Custody: Merchants retain full custody of their funds at all times.
3. Yield Generation: Merchants earn yield on pfUSDT, turning their liquidity into a revenue stream.
4. Smart Contract Governance: All transactions are governed by immutable smart contracts, ensuring security and trust.
5. No Centralized Custodian: PolyFlow eliminates the risk of a central authority holding merchant funds.
6. Streamlined Refunds: The refund process is fast and efficient, with no intermediary delays.

Conclusion: Empowering Merchants in the Web3 Era

PolyFlow represents a major shift in payment processing for businesses. By leveraging blockchain technology and stablecoin payments rails, PolyFlow empowers merchants with self-custody, real-time settlements, and yield-generation capabilities. Merchants are no longer at the mercy of centralized payment gateways and can instead focus on growing their businesses while maximizing their liquidity.

In the Web3 world, where decentralization and financial autonomy are key, PolyFlow is setting the new standard for payment gateways. Whether you’re a small business or a global enterprise, PolyFlow’s innovative approach ensures that your payment processes are secure, efficient, and profitable.

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