If Bitcoin was the buzziest term a few years ago, crypto payments are taking the lead today. Several businesses are analyzing the possibility of providing this payment model at their stores. Will this technology’s adoption increase, or will it temporarily disappear in the coming years? Should you offer it to your customers?
While people mainly use Bitcoin and other cryptocurrencies for mining, investing, crypto-assets, NFTs, and person-to-person transactions, cryptocurrencies have another use case: payments. People and businesses are starting to adopt this new payment system: more than 18,000 businesses are already accepting cryptocurrency payments.
Understanding crypto payments
When you hear the word cryptocurrency, the first thing that will probably come to mind is Bitcoin, one of the most popular forms of virtual currency.
Cryptocurrencies are decentralized networks based on blockchain that do not need the presence of a bank or government to operate. There are two different ways to make payments with cryptocurrencies:
- Manual transfer. People transfer cryptocurrency from one digital wallet to another using the recipient’s public address.
- Cryptocurrency payment gateway. It’s a facilitator of digital transactions that enables merchants and providers to accept cryptocurrency payments easily. A crypto payment gateway receives digital currency and converts it into fiat money, securely transferring it to the merchant.
What’s in it for your organization?
Crypto payments bring benefits both for consumers and businesses:
- No borders; more services; more customers. By using cryptocurrencies, the boundaries disappear. On the one hand, paying for international goods and servicesbecomes simpler, allowing people to have access to them worldwide. On the other hand, businesses drastically increase their base of potential customers. Merchants can use cryptocurrencies in nearly any part of the world, meaning they don’t have to use local currencies for international transactions.
- No banking institutions, more people. There are many people outside the formal banking system. Crypto payments allow them to send and receive money without needing credit cards and other traditional payment methods, addressing different demographic groups and increasing the customer base.
- Shorter periods to receive payments. Crypto payments eliminate the need for authorization requirements and wait periods, transferring payments in real-time.
- Increased security. Cryptocurrency transactions don’t need the verification of third parties. Instead, they are recorded in a blockchain. Customer data is stored in a ledger technology where all virtual transactions are securely hosted.
Crypto payments are already here
Massive adoption will happen as soon as people can use cryptocurrencies to pay for everyday needs, goods, and services. The global crypto payment gateway market is expected to grow with a CAGR of 22.8% between 2021 and 2027.
Several brands are already accepting crypto payments,; from Microsoft, which adopted crypto as a payment medium more than five years ago, to the fashion, food, and airline industries.
Starbucks partnered with iPayYou to enable their users to pay via digital wallets.
Gucci recently announced it will accept crypto payments in some of its US stores this summer. Also, the company BitPlay is partnering with merchants from the tourism industry to enable people to buy flights from their crypto wallets.
If you lean toward offering crypto payments, technology shouldn’t be a barrier. Crypto payment gateways are already out there, with many options available.
Ecommerce engines like Adobe Commerce (Magento), VTEX, CommerceTools, WordPress+WooCommerce, and Shopify, among others, are responsible for most eCommerce stores on the web. For almost all of them, there are off the shelf extensions-plugins already built that can simplify the whole journey.
Coming back to the original question: Should I offer crypto payments? My answer is yes, as long as you know how this form of payment aligns with your brand’s overall strategy. Also, as this is an emerging sector, your business can gain traction by being among the first to adopt this new payment model.
Accepting payments through digital wallets requires an organization to evaluate the compatibility with the type of business and the impact on back-office processes. Adopting crypto payments is a journey where organizations have the upper hand as it does not require extremely complex technical solutions, and the gains are significant.
Where should you start?
Here are some steps to get your organization started in the realm of crypto:
- Conduct a business assessment; does it make sense to implement crypto payments for my product/services? How can I benefit in the short-mid-long term?
- Choose the Services-Gateways-Plugins that better suit your business and your tech ecosystem.
- Design an optimal UX/UI experience. Here it’s critical to understand how crypto payments work.
- Implement and start receiving payments!
The takeaway
The payment ecosystem is evolving, and cryptocurrencies bring to the table a more convenient and faster way to do transactions, benefiting both customers and brands. We are moving towards a cashless economy, where customers want to pay for goods and services as quickly as they browse through social media.
Visit our Digital Experience Platforms Studio to learn more about how we combine knowledge in cybersecurity, biometrics, and regulatory environments to help companies offer crypto payment solutions and be part of the digital payment ecosystem.
