Big data is a term used to refer to extensive sets of data that are harnessed and analyzed by computers to reveal patterns, trends, estimates, and associations, particularly relating to human behavior. It is being used more daily in different industries to help meet the challenges of an increasingly digitized world. In particular, it has found a leading use case in the payments sector. Here it can be used to help combat fraud and financial crime and to provide an additional layer of protection for customers and operators. But what about when it comes to cryptocurrency payments?

How are crypto payments changing the world?

Cryptocurrency payments are increasingly popular, with up to 300 million people using them worldwide. Their allure is not just due to their innovative and new nature but rather the benefits they provide for companies and individuals alike. For example, cryptocurrency payments allow the world's 1.7 billion unbanked individuals to access goods and services online that they would not have been able to before.

They also offer shorter transaction times that can also be lower cost. Another one of the benefits is that payments can be made with only a pseudonym, meaning private information is shielded from the online world, where hackers and criminals can target it. All in all, cryptocurrency payments are set to become more common in the coming years as people seek new ways to pay, with added assurances.

What are the challenges with crypto payments?

As with any kind of online payment, the threat of fraud looms large and is growing. As more of the world starts using online payments and services, the sector becomes more enticing for criminals that seek to engage in nefarious activity.
Cryptocurrency is being used widely as a way to secure transactions for many customers as it offers accountability and transparency and means the consumer doesn't have to input their personal card or bank details into a platform. In the online gambling sector, for example, considered a high-risk industry by banks, crypto payments are thriving.
Consumers flock to make safe crypto payments unrelated to their personal information, such as name, ID, or address. More and more gambling sites, as well as trading sites, and eCommerce merchants are all now offering crypto payments as a way to provide more security for users.

How is big data helping?

Big data and analytics are being harnessed by fiat and crypto payment providers and financial institutions to crack down on fraud and other issues related to security. Big data can be used to analyze billions of transactions to identify potentially fraudulent or suspicious activity taking place on their platforms. For example, big data can tell us whether someone is logging in from an unusual IP address or their latest transaction is in line with their normal behavior.
Big data can also provide important information to merchants on how their customers want to pay, play, shop, or buy and enhance personalization capabilities. When combined with AI, big data can also anticipate customer solvency, minimize the risk of financial decisions, increase security mechanisms, reduce costs, and even expect fraud before it happens. This is excellent news for those using cryptocurrency payments or still sticking with fiat.