Legacy banking and web3 can feel like completely different worlds. You might associate the former with Wall Street and ATMs, and the latter with crypto wallets and NFTs. In reality, they both benefit different populations for different reasons. Payment providers like Stronghold can tap into the power of both to meet your unique business needs. In 2023, every business is different. Bridging legacy banking and web3 provides solutions that reflect business diversity.
What is legacy banking?
Legacy banking is what most people associate with banks – physical locations with ATMs and employees on-site. It includes household names like Bank of America, Chase, and Wells Fargo. Legacy banking formed the pillars of business and personal finance worldwide. In the United States, legacy banks provide valuable business resources like loans, routing numbers, and cash withdrawals.
Legacy banks have adapted to a digital world in the past ten years. Most offer phone applications and easy online banking support. Physical branches have closed in favor of handheld services like app-based check depositing and payments. Still, legacy banking remains difficult for people and businesses in underserved markets or communities. Underserved sectors include remote geographical areas, companies with high compliance burdens, or small businesses just starting. Everyone needs convenient payment options; combining traditional tech with new breakthroughs makes this possible.
What is Web3?
As Stronghold’s team member Lena explains in the above video, web3 refers to the next wave of the internet. Web1 focused on conversion, bringing print materials into digital versions. Think online encyclopedias and the internet’s first newspapers. Web2 followed and was all about connection. It was the era of blogs, marketplaces, and social media. Web2 transformed the internet into a valuable information source. Large corporations like Google, Amazon, and Facebook drove this information sharing. They gathered user data to build services that are now part of our daily lives.
Web3, the era we’re entering now, gives power back to individuals. It prioritizes independence and collaboration, where users decide where their data ends up. You’ll often hear web3 sources mention decentralization. This means there is no Google or Amazon at the center of networks. Instead, countless users make up decentralized systems. Popular decentralized technologies include cryptocurrencies, NFTs, and dApps, decentralized versions of applications like social media and messaging. It also transforms payments.
How Stronghold brings web3 and legacy banking together
Stronghold was born out of web3. Our co-founders established the company to help “normal” companies use decentralized finance (DeFi) in their daily operations. Decentralized payments are faster and more inclusive, helping to reach some of those underserved communities mentioned earlier. Using decentralized communities can mean the difference between a payment arriving on time and it incurring a late fee due to bank delays.
Here’s an example of what bridging web3 and legacy banking looks like at Stronghold. A brand-new small business may reach out to us to help streamline its retail e-commerce payments. We connect them with ACH payments to pull money from customer accounts directly into business accounts after a purchase. Because the business works with Stronghold, they are part of our Merchant Rewards program. They receive rewards in our decentralized web3 token, SHx, for every dollar transacted through our network. At Stronghold, legacy banking payments create value as a web3 token.
Stronghold also makes virtual payment networks accessible to non-crypto companies. With our tools, you don’t need a web3 expert on your team. Our offerings plug directly into Bitcoin, Ethereum, Stellar, and other crypto platforms while still providing the payments you expect. You don’t have to work with everything individually, which saves time for SMEs.
Bring your business to the next generation of the internet, starting with payments. To learn more about our solutions, visit www.stronghold.co.
