On Feb. 1, Solana Labs announced the launch of Solana Pay in a joint collaboration Circle, Checkout.com, Citcon, Phantom, FTX, and Slope.
The announcement stated that the premise behind the new service is that the actual payment and its underlying technology “goes from being a necessary service utility to true peer-to-peer communication channel between the merchant and consumer.”
The app will allow users to send stablecoins such as USDC from their crypto wallets directly into a merchant’s account, where they are settled almost instantly with very low transaction fees.
The next phase of its development will enable the merchants to send crypto assets back to the consumers, “which will open up new capabilities in commerce not possible before,” according to Sheraz Shere, head of payments for Solana Labs.
Shere previously worked at American Express and Google, helping to launch Wallet and Google Pay.
Solana Pay is entering a crowded ecosystem of existing payments apps where tech giants Apple and Google currently dominate. There are also a number of other huge payments players such as PayPal, which is reportedly working on its own token, Venmo, Wise, Cash App, and Stripe.
Very few of these support cryptocurrencies natively, however, so Solana aims to bridge that gap while going beyond just paying with crypto. Shere elaborated:
“Merchants have been able to accept crypto currencies for years, but acceptance usually means settling in non-stable currencies, swapping out one intermediary for another, and duct-taping together square pegs and round holes.”
He added that merchants should also benefit from the advantages of decentralized crypto payments such as “network cost savings, DeFi yield generation, zero fraud liability, instant settlement, and ownership of the customer relationship.”
Solana Pay will operate primarily with USDC but will also enable other network-related crypto assets such as SOL, FTT, SRM. SOL prices have gained 4% on the day to reach $110 at the time of writing, however, the asset was still trading down 58% from its Nov. 6 all-time high.
Solana has often been dubbed an “Ethereum killer” due to its higher throughput, but it has also suffered a number of network outages recently which makes this moniker highly questionable.
In late January, the network suffered 48-hour outage caused by arbitrage bots spamming the system. This followed a DDOS attack which knocked it out earlier in the same month. Solana also went down in September and December last year due to similar overloading issues so maybe it isn’t quite ready to “kill Ethereum” just yet.