The Pros of Accepting Crypto Payments for Digital Commerce Companies

If there are any keywords that will define 2022, “cryptocurrencies” will undoubtedly be at the top of the list.

Once considered a niche asset mainly for the tech-savvy, the global market is expected to reach $57 million by 2025, indicating that cryptocurrencies are ready to become a major disruptor in the world of retail.

As the typical customer gains a better understanding of cryptocurrencies and fintech becomes more accessible, merchants will confront more expectations around its use and adoption. This article is here to throw some light on this frequently perplexing subject – and to explain why merchants should be paying attention to cryptocurrencies.

What exactly is Cryptocurrency?

Cryptocurrencies are based on a decentralized digital ledger system that allows individuals or businesses to conduct secure, encrypted payments to one another. It uses blockchain technology to record transactions and verify money ownership in real-time. This keeps 'coins' or tokens from being copied or stolen.

Unlike traditional payment systems, which are managed by a single institution such as a bank, cryptocurrencies are held in a peer-to-peer network. This connects thousands of users, each of whom plays a role in authenticating and encrypting new transactions. This makes payments extremely secure and nearly impervious to attack without alerting the entire network. For merchants looking to welcome crypto-bearing customers, one of the simplest ways is to implement a cryptocurrency payment gateway. 

Cryptocurrency's Advantages for Digital Commerce Companies

Increased market attractiveness

The logic is straightforward: the more payment alternatives your e-commerce store provides, the more appealing it is likely to be. Certain credit/debit card kinds are not available in all countries, making it more difficult for you to benefit from a varied consumer base. Cryptocurrency has the advantage of being available worldwide and not being controlled by any state or territory, making it a particularly stable option.

Cost

Traditional payment options, such as banking and credit cards, typically have large transaction costs and commissions, which is a significant disadvantage for your company. While cryptocurrencies still involve third parties, as a merchant, you have far more control over what you'll pay in transaction fees.

Speed

Payment processing periods might vary dramatically between banks and credit card issuers, which can disrupt your cash flow. Cryptocurrency transactions are instantaneous, allowing you immediate access to sales income.

Security

Because all well-established cryptocurrencies use a decentralized ledger system, it is hard to reverse or cancel a transaction after it has been completed. This provides retailers with significantly increased security against fraud and theft.

Cryptocurrency and e-commerce: A Powerful Combination?

Despite the current spike in interest in cryptocurrencies, its usage by small to medium-sized e-commerce companies has yet to be thoroughly investigated. However, as we become more accustomed to the convenience and seamless aspect of digital buying, cryptocurrency will only become more appealing.

Online shopping isn't constrained by time or space, allowing customers to shop whenever and however they choose. Slow or inefficient payment methods will only become more apparent to consumers as e-commerce companies try hard to remove friction from the user experience.

Furthermore, the COVID-19 pandemic has brought more customers online than ever before – but it has also raised security concerns. 

According to a recent poll, 60 per cent of SMBs believe their consumers are more concerned than ever about falling prey to fraud or scams during this time. When combined with exceptionally low levels of trust in banking institutions, this lays the stage for a significant shift in how consumers see cryptocurrency.

In fact, according to a research survey conducted in February 2021, 57 percent of US-based consumers believe that large firms should begin accepting cryptocurrencies as a form of payment. With big platforms like Shopify now allowing retailers to take payments through their online stores, it's clear that cryptocurrency is becoming a legitimate alternative to traditional payment methods in the eyes of consumers.

What Other Ways Can I Use Cryptocurrency in E-commerce?

Loyalty schemes

Loyalty programs are nothing new in the world of e-commerce, but many businesses have battled to keep their customers engaged in their programs. Because it is based on blockchain technology, bitcoin is an excellent way to provide a store credit to customers. Loyalty tokens cannot be lost or stolen since the secure digital ledger arranges your records for you. Furthermore, because shops cannot change the value of a token while redeeming rewards, the open system promotes confidence.

Adding value to the customer experience

Because cryptocurrencies provide highly precise data records, retailers can utilize them for purposes other than payment systems. Coins or tokens, for example, can be used to trace the manufacturing of the products or outfits they carry in their online stores, providing consumers with an unparalleled amount of transparency into your supply chain. This results in a better customer experience and, as a result, more loyal customers.

Marketplace expansion

Cryptocurrency has caused a significant upheaval in the ecommerce sector, with easy integrations of cryptocurrency payment gateways, they provide merchants with both security and lower fees. It's a terrific alternative for people wishing to vary their selling channels because it has significantly less competition than other marketplaces.

Although widespread adoption and use of cryptocurrencies is still a long way off, retailers should keep a watch on developments in this field. In the midst of the coronavirus pandemic's seismic shifts, consumers perceive bitcoin and other major crypto coins as a practical answer to the problems they see in traditional commerce - which means big changes for early adopters.