Is It Time To Accept Cryptocurrency As Payment For eCommerce
The disruption of the financial services industry has naturally spilled over into the eCommerce landscape. According to our friends at fortunly.com, retailers represent the largest group of non-bankers that provides fin-tech solutions to consumers. What do you think about cryptocurrency as a payment for eCommerce?
One of the boldest moves made by advanced tech-driven online merchants thus far is the adoption of cryptocurrency. This phenomenon is crucial, for it is an important step to finally ending the decades-long era of fiat money, which is not backed by any asset with real value and is constantly being manipulated by central banks.
So, should you begin integrating crypto options (in addition to credit cards and digital wallets) into your points of sale? The answer is not exactly straightforward.
Why You Should Adopt Cryptocurrency
Reduced overhead is the main advantage of cryptocurrency acceptance. As decentralized forms of money, cryptos eliminate the need for bank verification as well as the charges that come with it.
To be clear, you may still need a third-party payment processor, which does not provide free services. Cryptocurrency payment facilitators charge just 1%, although sometimes they don’t charge anything at all. On the contrary, credit card intermediaries and digital wallet platforms typically impose fees ranging from 2% to 4% per transaction.
Chargeback fraud avoidance is another reward for the adoption of cryptocurrency. A 2016 study revealed that merchants pay $2.40 for every dollar of fraud. It does not take a math whiz to see that the true cost of fraudulent purchases is outrageously expensive, and a high chargeback rate can eat into any retailer’s revenue.
Unlike purchases made on credit, those paid with crypto are irreversible. The more cryptocurrency-based transactions you have, the less your business is exposed to potential fraud-related financial losses.
Moreover, without the threat of chargebacks, you can access your funds more quickly. The most preferred cryptocurrency payment platforms ensure that the proceeds from sales are readily available.
Despite the apparent ubiquity of credit cards and digital wallets, they are actually not as pervasive around the world as you might think. If you wish to expand into markets where cryptocurrency payments are more popular than other methods, crypto will increase your global footprint.
Since the top cryptocurrencies today are somewhat globally recognized, they are less susceptible to super-high exchange rates. If you often rely on exported products and services, embracing such forms of digital cash can maximize your profit margins.
Why You Should Not Adopt Cryptocurrency (Yet)
Cryptocurrency is the likeliest candidate to challenge the dominance of fiat money and establish a new financial world order. However, there is a reason why it has not reached its full potential despite being in existence for almost a decade now. Merchants that consider accepting crypto payments have two things to worry about: price volatility and regulation.
In 2018, Bitcoin was the subject of a massive financial bubble. Its price historically reached $19,511 in December 2017 before steadily plummeting to an epic proportion in the months that followed. The bubble did not kill the world’s first and leading cryptocurrency when it popped, but it provided a painful lesson in speculation.
While the crypto world has been successfully recovering from the devastating Bitcoin market crash, it is still struggling to erase the great risk attached to it in order to inspire mass adoption.
Furthermore, cryptocurrency is one of the Fintech concepts that lack sufficient legislative coverage. The American government may currently allow the trading of cryptos, but, due to their uncertainties, policymakers may be forced to support prohibitive regulations in the future, which can affect their viability.
Many merchants continue to adopt cryptocurrency strategically to improve the image of their brands and attract Fintech-savvy consumers. Whether or not you take a huge leap of faith to gamble on it now, it is imperative to stay current with the latest news and trends surrounding it to keep a lookout for signs of another bubble and avoid missing out on vital business opportunities. Maybe it is time to accept cryptocurrency as payment for eCommerce, but maybe it isn’t.