Blockchain payments in 2026: a step by step guide for businesses

What are blockchain payments?

Blockchain payments move value directly between parties on a shared digital ledger, instead of relying on traditional intermediaries such as banks or card networks. Each transaction is verified by a decentralized network of computers (known as nodes) and recorded permanently on the blockchain, which is a secure, transparent, and tamper-resistant database.

Unlike traditional payment systems that depend on clearing houses or settlement windows, blockchain payments can run continuously, 24 hours a day, anywhere in the world. The technology can remove the need for correspondent banks, and reduce the fees and delays that come with cross-border transfers.

For businesses, this means faster settlement, lower transaction costs, and full visibility into every transfer. Because each transaction is time-stamped and immutable, finance teams can execute payments with accuracy and confidence.

The blockchain payment journey: step by step

Step 1: Initiate the payment

The sender starts a transaction from their digital wallet, entering the recipient’s public address and the amount to send.

Step 2: Broadcast to the network

The wallet generates a digital signature and broadcasts the transaction to the blockchain network for validation.

Step 3: Verify the transaction

Network nodes verify that the sender has enough balance and hasn’t double-spent those funds. Invalid transactions are automatically rejected.

Step 4: Add the transaction to a block

Validated transactions are grouped into a block, ready to be confirmed and added to the blockchain.

Step 5: Confirm through mining or validation 

Miners (in proof-of-work systems) or validators (in proof-of-stake systems) confirm the block. Once confirmed, it becomes a permanent part of the blockchain.

Step 6: Record and complete settlement

The updated blockchain ledger is distributed across the network, reflecting the completed payment in both parties’ wallets. Settlement usually occurs within minutes.

Understanding the technology behind blockchain payments

What is distributed ledger technology?

Distributed ledger technology is the foundation that blockchains are built on. It’s a decentralized database that lets multiple participants record, share, and verify information in real time. Because no single authority controls the data, every participant holds the same copy of the ledger, making it transparent and tamper-resistant. In payments, this ledger can enable fast, secure, and low-cost transactions across borders.

What is a blockchain?

A blockchain is a specific type of distributed ledger technology that stores information in blocks linked together in chronological order. Each block contains a list of verified transactions that can’t be changed once confirmed. Cryptographic hashing and consensus mechanisms make the blockchain secure and immutable. While all blockchains use distributed ledger technology, not all Distributed ledger technology is blockchains; other distributed systems include directed acyclic graphs (DAGs). Common public blockchains include Bitcoin, Ethereum, and Solana.

What is cryptocurrency?

A cryptocurrency is a digital form of money that exists on a blockchain network. It allows users to send and receive value directly without banks or payment processors. Examples include Bitcoin (BTC), Ether (ETH), and stablecoins like USD Tether (USDT). 

When you hold cryptocurrency, you own a blockchain address associated with a balance on the ledger, not a physical coin. Cryptocurrencies use distributed ledger technology to make transactions secure, decentralized, and transparent.

While cryptocurrencies like Bitcoin and Ether are well known, most businesses prefer a more stable digital asset for payments, and that’s where stablecoins come in.

What are stablecoins?

Stablecoins are digital currencies designed to maintain a steady value by pegging to an asset such as the US dollar or euro. They combine the speed and transparency of blockchain payments with the price stability of fiat money.

Stablecoins make blockchain payments more practical for businesses. They allow you to move value near-instantly across borders without the volatility in cryptocurrencies like Bitcoin or Ether. A US dollar–pegged stablecoin, like USDC for example, always represents roughly one dollar of value.

What are miners and how do they secure the network?

Miners are network participants that validate transactions and add new blocks to the blockchain. They contribute computing power, or “hash power,” to verify data and are rewarded with newly minted coins and transaction fees.

Two main models govern this process:

• Proof of work (PoW): Miners compete to solve cryptographic puzzles, and the first to solve one confirms the block. Used by Bitcoin, Litecoin, and Dogecoin.
  
  
• Proof of stake (PoS): Validators stake coins for a chance to be randomly chosen to add a block. Used by Ethereum, Cardano, Solana, and Tezos.
  By making validation computationally or financially costly, both systems protect the network from fraud and spam.
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What are nodes?

Nodes are computers connected to a blockchain network that verify and record every transaction. Each node holds a full copy of the blockchain ledger and communicates with other nodes to ensure accuracy. For example, thousands of bitcoin nodes around the world, from the UK to Malta, hold identical copies of the same ledger, which maintains consensus and network integrity.

What’s the difference between public and private keys?

Every blockchain user has a pair of cryptographic keys.

• A public key (or address) works like a bank account number. You share it with others to receive payments.
  
  
• A private key acts like your PIN. It proves ownership of funds and must be kept secret. Losing it means losing access to your cryptocurrency.
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Together, these keys let you send, receive, and secure payments safely on the blockchain.

How do public addresses and private keys work in practice?

Here’s an example of an Ethereum public address:
0x9581d30a99e23e75330cf1fc4a537dbd3f56d226

Depending on the network, a public address may stay the same (as with Ethereum) or change with each transaction (as with Bitcoin). Each transaction also generates a unique transaction hash that proves it was validated and added to the blockchain, providing an additional layer of privacy for users.

A private key gives you access to and control over the funds sent to your public address. Unlike a public address, it should never be shared. Think of it as your PIN - anyone who gains access to your private key can transfer your assets.

Most wallets help users store their private keys securely using a recovery phrase, which is a 12–24 word code generated from the private key. This phrase allows users to recover their funds if the wallet is lost or replaced.

What is a cryptocurrency wallet?

A cryptocurrency wallet combines a user’s private key and public address. Both are needed to view balances and send or receive cryptocurrency. Creating a new wallet means generating a new set of private and public keys, which essentially creates a new user on the blockchain.

Wallet applications make it easier to manage multiple coins in one place. A single wallet can hold different cryptocurrencies, or a user may prefer a separate wallet for each currency.

What are the main types of crypto wallets?

Wallets are generally divided into two main categories: custodial vs. non-custodial and hot vs. cold. Each type offers different trade-offs between control, convenience, and security.

Custodial vs. non-custodial wallets

A custodial wallet is managed by a third party, often a crypto exchange such as Coinbase or Binance. Because the provider controls the private key, the third party effectively owns the crypto.

In a non-custodial wallet, the user holds the private key and therefore full ownership of the coins. However, if the user loses the private key, then they can’t recover the crypto. Similarly, someone with the private key can access the wallet application and transfer out everything in it.

In short, non-custodial wallets give users greater control but also greater responsibility for their own security.

Hot vs. cold wallets

A hot wallet operates online, making it easy to access but dependent on the security measures of the wallet provider. 

A cold wallet is a physical device, about the size of a USB stick, that stores keys offline. It can be secured with traditional methods, such as a safe or a bank vault.

Just as customers use different accounts for savings and daily spending, crypto users often use both hot and cold wallets. A cold wallet serves as a secure long-term store of value, while a hot wallet enables quick, everyday transactions.

Businesses can take a similar approach, using cold wallets for crypto assets held on the balance sheet and hot wallets for operational expenses and customer payouts.

But understanding how blockchain infrastructure works is only part of the story. For enterprise payment leaders, the real question is how this technology improves efficiency, compliance, and speed at scale. 

Here’s why blockchain payments are becoming a competitive advantage for fintechs and payment service providers.

Why blockchain payments matter for enterprise businesses

For fintechs and payment service providers, blockchain technology offers a new settlement option designed for speed, global reach and cost efficiency. 

Instead of routing funds through correspondent banks, payments on blockchain rails settle directly between counterparties, often within minutes. The result is a faster, more predictable flow of funds across markets.

Traditional cross-border payment systems remain limited by legacy rails, daily cut-off times, and inconsistent settlement standards. 

In contrast, blockchain networks operate continuously - 24/7, 365 days a year - with full visibility into transaction status. This always-on capability enables fintechs and PSPs to optimize liquidity management and deliver a more reliable customer experience.

Blockchain payments also reduce reliance on intermediaries, lowering operational costs and friction in high-volume transaction environments. Every transaction is timestamped, traceable, and final once confirmed, removing the risk of chargebacks and settlement reversals. 

That level of transparency strengthens compliance processes and audit readiness, which is critical for regulated financial institutions operating at scale.

Blockchain infrastructure can help enterprises scale globally by connecting treasury operations directly to digital asset rails and stablecoin liquidity pools. 

Combined with fiat settlement from a regulated provider, it allows businesses to maintain compliance, manage volatility, and streamline treasury operations across currencies and jurisdictions.

How a payment provider supports your blockchain payment journey

Implementing blockchain payments at scale requires more than technology. Enterprise fintechs and payment service providers also need the right infrastructure, compliance coverage, and operational support to integrate digital asset rails effectively. 

That’s where a specialized payment partner adds real value - managing complexity so your teams can focus on growth.

A trusted payment provider helps you:

• Optimize checkout conversion by supporting the most-used digital currencies and delivering a seamless, branded payment flow.
  
  
• Secure competitive FX and crypto pricing, locking rates during the transaction window so you can guarantee prices for customers.
  
  
• Simplify treasury operations by using the provider’s secure wallets to receive payments, without holding digital assets on your balance sheet.
  
  
• Settle in fiat or crypto through multi-currency infrastructure, with funds deposited directly into your bank account minus standard fees.

Once you’ve established these systems, you can operate global payment flows with the speed and transparency of blockchain, while maintaining the compliance and reliability expected of enterprise finance.

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Ready to modernize your payments infrastructure?

BVNK helps enterprise businesses build financial products, unlock markets and move money in seconds. Speak to one of our experts to explore how BVNK can support your blockchain payment strategy.

FAQs

Are blockchain payments secure?

Yes. Every transaction is verified by multiple nodes on a distributed network and recorded on an immutable ledger. Once confirmed, a payment can’t be altered or reversed, reducing the risk of fraud and chargebacks.

How do blockchain payments differ from traditional cross-border payments?

Traditional payments rely on correspondent banks and clearing systems that operate on limited schedules. Blockchain payments move value directly between parties, settle within minutes, and operate 24/7, which cuts both cost and settlement time.

Can enterprises settle blockchain payments in fiat currencies?

Yes. Licensed payment providers can convert digital assets into fiat currencies instantly and deposit the funds into your business account. This lets you benefit from blockchain speed without holding crypto on your balance sheet.

What are the compliance considerations for blockchain payments?

Enterprises must still meet AML, KYC, and sanctions-screening requirements. Working with a licensed partner ensures that blockchain payments follow the same compliance standards as traditional financial networks.

Which blockchains are commonly used for payments?

Most enterprise-grade payment solutions use established networks such as Tron, Solana, Bitcoin, Ethereum. The choice depends on cost, speed, and the level of institutional adoption.