Cryptocurrency is making some headway in the e-commerce world. Digital currency is receiving more attention after years of growing pains. Yet, this technological “cash” still meets controversy as its acceptance unearths further complications.
Only a small percentage of e-commerce companies currently accept cryptocurrency payments. But, that number is inching upwards. Cryptocurrency appeals to a technological-savvy demographic, which some businesses wish to appeal to. Still, the crypto concept remains confusing and untrustworthy to most consumers.
Consumers are not the only ones perplexed by cryptocurrency. Online merchants aren’t sure of or are set against accepting crypto payments. Some have only recently shifted from brick-and-mortar to e-commerce.
Even so, cryptocurrency observers predict that the future will see more of this form of payment. Merchants may need to prepare themselves in case of an incoming crypto-boom.
There is an overwhelming amount of information about buying, investing, and selling cryptocurrency. Regulations must keep up with lightning-fast jumps and drops in crypto-value. The shifting adjustments continue to fester complexity.
Encryption technology backs up crypto. Meanwhile, banks and governments back up standard currencies. Here are a few other fast facts about the origin and rise of cryptocurrency:
- Bitcoin is the first legitimate cryptocurrency, but others unsuccessfully attempted the online currency concept before 2010.
- Blockchain is an “online ledger and transaction log” that makes cryptocurrency possible.
- A guide to cryptocurrency may include the different types of cryptocurrencies and terms unique to the technology behind them.
- The IRS still taxes cryptocurrency as an asset instead of a currency.
- There are 10,000 types of different cryptocurrencies in 2021.
- About 100 million people worldwide use and invest in cryptocurrency.
- BlockFi offers credit cards and other financial products using cryptocurrency, acting almost like a bank. The company currently faces accusations from regulators. However, the Federal Reserve is considering whether to distribute cryptocurrency while some of its members question it.
Studying up on cryptocurrency may not be a priority for most merchants. It will take time and experience for commerce and consumers to catch on.
The unique benefits of cryptocurrency are what make its widespread use a possibility. Ultimately, it is up to the discretion of buyers and sellers whether it is worth it to participate.
Why Consumers are Using Cryptocurrency
Tech-savvy consumers and investors see cryptocurrency as a viable way to increase wealth. Some also argue that people can safely purchase products and services with it. Either way, fintech start-ups and apps are paving the way to greater consumer use. Their aim is to make buying and selling digital currencies easy to understand.
There is also the appeal of accessibility. There is no need to visit or talk to a traditional bank to start using cryptocurrency. Individuals and companies can transfer it without lengthy verification processes or hefty fees. There is no outside approval required for transferring to others, including between countries.
Additionally, the encryption backup cryptocurrency boasts feels safer for some. This way, they feel that they are not as vulnerable to economic breakdowns.
Why Other Consumers are Not Using Crypto
Many times, when the big companies opt out of a trend, so do many individuals.
Such was the case when Elon Musk announced that Tesla would no longer accept Bitcoin as payment. Bitcoin then dropped 12% in value.
Cryptocurrency is not as swayed as traditional money in economic crises. What does impact the flow are influential businesses.
This unpredictability makes many nervous. Cryptocurrency makes traditional financial security advocates uncomfortable. They may not seek it out to avoid economic crises or restrictive monetary policies.
The irreversibility of cryptocurrency transactions further discourages the public. There is a lack of consumer protection when people buy with crypto. Customers are more likely to win disputes against merchants if they used a credit card.
The concept is also complex. Many may not even know that there are other uses than investment for cryptocurrency. If people are unsure how or when to use the crypto they buy, they most likely won’t take part.
A study by The Ascent did find that many would use crypto if their primary banks made it available for use. Crypto use by trustworthy financial institutions may persuade Americans towards the trend.
Additionally, people who use cryptocurrency as an investment may not be using it for consumption. This brings merchants to focus on the demographic of those paying for items with digital currencies.
Why eCommerce Businesses are Accepting Cryptocurrency
An attractive aspect of accepting cryptocurrency payments is low transaction fees. Credit card interchange fees are prompting some merchants to look to crypto. Businesses can accept cryptocurrency for as low as a 1% fee per transaction.
There is also the argument that there is a reduced chance of fraud. This may be true for merchants. Hackers target blockchain platforms rather than merchants for crypto fraud. False purchases are less likely to happen because crypto payments are difficult to reverse.
Some businesses may fare better by catering to the cryptocurrency audience, like those specializing in tech. If companies are unsure whether to accept crypto, they can look at how likely their customers will use it and whether their competitors are accepting it.
Why Other eCommerce Businesses are Not Accepting Crypto
Just like nonparticipating consumers, many business owners are not aware of or are unsure of cryptocurrency. There is still not yet a large consumer demographic that will buy digitally.
There are also too many cryptocurrency options to choose from with their pros and cons.
Furthermore, recent climate crises prompt many people to support businesses using environmentally friendly measures to operate. It would seem like cryptocurrency would be the greenest option for payment, but it surprisingly has an enormous carbon footprint. “Mining” digital currency requires using high-powered advanced computers and technology. Some are looking to use sustainable energy sources to mine Bitcoin instead of fossil fuels.
How Do I Start Accepting Cryptocurrency as a Payment Method?
Let’s say you’ve decided that the benefits of accepting cryptocurrency outweigh the cons. Where can you start?
You would first need to obtain a cryptocurrency, or blockchain, wallet. Crypto wallets are like bank accounts. This is where you would store, transfer and receive cryptocurrencies. You are also able to convert them into your standard currency. The wallets can accept most types of cryptocurrencies.
Revitpay can set you up with a secure crypto wallet along with a specialized app to process cryptocurrency as payment. Still have questions about the process? Feel free to email or call us to help with your cryptocurrency payment setup.