In traditional card processing, a transaction must be authorized by the card issuer before the merchant receives confirmation. That authorization involves checking the cardholder's available balance, applying fraud screening rules, and evaluating the transaction against the issuer's risk criteria. If any check fails, the transaction is declined. In blockchain payment processing, the authorization is handled by the customer's wallet and the blockchain network. The customer signs the transaction with their private key, the network validates it through its consensus mechanism, and the transaction is confirmed. No issuer authorization is required.
This difference matters for high-risk merchants because traditional authorization includes product-category screening that blockchain authorization does not. A card issuer may decline a transaction because of the merchant's category code. A blockchain network confirms a transaction based on whether it is technically valid, not based on what the merchant sells. Blockchain payment processing through 27 Blockchain leverages this structural difference to provide merchants in restricted categories with a functional payment channel.
