Unless you’ve been living under a rock, you’ve no doubt felt the buzz surrounding blockchain and cryptocurrencies. The rise of digital wallets is giving way to more convenient and instantaneous payment systems and, as a result, is altering the way we conduct business. Since cryptocurrency is automatically converted into local currency for merchants when they use a payment processor, accepting this form of payment can be fairly straightforward for retailers. Despite this, most have not yet embarked.
If you have an e-commerce business, adopting cryptocurrency as a payment method can improve your customer journey and expand your consumer base by offering more options at checkout. To get you started, here are some reasons to implement this service in your e-commerce business.
But what are cryptocurrencies?
Plain and simple, cryptocurrency is a digital currency that is not controlled by any bank or government, but uses encryption techniques to regulate its use and generate its release.
Each transaction that occurs is verified by users in a network and, in general, these transactions become public records to prevent the same user from spending the currency multiple times. The key to using cryptocurrency is to understand that each coin is unique and some coins offer more protection and privacy than others.
We tell you how it can benefit your e-commerce:
E-commerce and cryptocurrency complement each other quite well, as they share the same home and both appeal to the digitally savvy user. As an e-commerce retailer, you should view cryptocurrencies the same way you view your business. It is an additional option for those looking for a faster and more convenient way to pay for goods and services. This shows the high demand for digital media-based payments among an online consumer base. With cryptocurrencies, there is no need to go to a bank, withdraw money or even enter a credit card number before making a payment at checkout.
The best benefits they can have:
Broader market
Accepting cryptocurrency as a payment method will give you access to a whole new market of tech-savvy consumers who have created a community within the cryptocurrency market. The option to pay through a digital wallet or credit card platform can allow you to tap into broader markets and attract consumers from around the world.
Fast transactions
Unlike credit card systems that take a few days to process, cryptocurrency is processed immediately, giving you much faster access to funds. Fast transactions can help optimize your company’s cash flow.
Low rates
Another benefit of offering cryptocurrencies as a payment method is the low fees associated with each transaction. Fees may vary depending on whether you accept cryptocurrencies in your personal wallet or through a third-party provider such as Coinbase, but you are likely to find them significantly lower than fees from services such as PayPal or credit card providers.
More security
After a customer completes a cryptocurrency transaction, it becomes difficult to reverse unless you have the merchant’s consent. This offers retailers more security when it comes to e-commerce fraud, as there is no intermediary force, such as a bank, that can withdraw funds from your account without your consent.
And you may be wondering, but how do I accept cryptocurrency payments in my e-commerce?
We tell you about it below.
There are two ways to accept cryptocurrencies in your e-commerce: through your personal wallet or through a third-party payment processor.
If you are going to accept cryptocurrencies through your personal wallet, you will need to increase a virtual wallet. Most wallets can be quickly downloaded to your phone or computer, or you can get a hardware wallet. A hardware wallet is a physical safe that stores the cryptocurrency on the device on a special hard drive. It is really the only secure hardware device that can store a user’s private key.
Otherwise, you can use a third-party payment processor, such as Coinbase or BitPay, and they will handle the entire payment process, just like credit card payment processors do. One benefit of using a third-party payment processor instead of a personal wallet is that they can instantly convert cryptocurrency into fiat, saving you from any price volatility. Price volatility refers to the changes in value to which the cryptocurrency is subject, which can sometimes be rapid and extreme. Being protected from this means that you will be paid the amount you charge, even if the value of the currency changes in the middle of the transaction.
Choosing a wallet and supplier can be a complicated process. Remember that not all wallets and exchanges are reliable, as anyone can start their own cryptocurrency trading exchange platform. If you are interested in doing this, you may want to consider hiring a blockchain developer.
We leave you with the top 5 cryptocurrencies to consider:
- Bitcoin
Bitcoin is the currency that started it all. Before coming to life, its creator, Satoshi Nakamoto, drafted the idea in a paper titled “A Peer-to-Peer Electronic Cash System” in 2008. Nakamoto hoped to create a system that would decentralize the financial sector and give power back to the people through a system of digital transactions.
- Ethereum
Ethereum was a currency created from the invention of Bitcoin. Its creator, Vitalik Buterin, wanted to develop a platform that would completely transform the Internet. He envisioned Ethereum as a platform that would be used for more financial transactions than Bitcoin allows. The Ethereum platform is now a place for developers to create decentralized applications, such as contracts or code, without using third-party platforms.
- Dogecoin
While it started as a joke by software engineers Billy Markus and Jackson Palmer, Dogecoin has become a valid currency in its own right. Based on the Doge meme, Dogecoin evolved from a satirical commentary on cryptocurrency to a legitimate investment opportunity that has become more popular than its creators expected. Some still look at it with suspicion, but support from the likes of Elon Musk has forced Dogecoin to be taken seriously.
- XRP
XRP, also known as Ripple, is an independent digital asset held in the decentralized XRP Ledger cryptocurrency, which is managed by a network of peer-to-peer servers. XRP was designed for users to send money digitally and not be subject to the high transaction costs and conversion times of bitcoin. XRP can be bought and sold publicly, and is a currency that allows people to send money quickly around the world, securely.
- Bitcoin Cash
While Bitcoin Cash is very similar to Bitcoin, there are notable differences that set them apart. Bitcoin Cash allows more transactions to be processed by increasing the block size. By increasing the number of transactions, Bitcoin Cash hopes to compete with industry giants such as Visa and PayPal.
In short:
If you want to keep your business ahead of the curve, it is definitely worth considering the option of accepting cryptocurrencies in your e-commerce. Especially since crypto processors like BitPay can protect your business from price fluctuations, so your brand won’t risk losing money due to changes in currency value. You can attract cryptocurrency enthusiastic customers and increase your brand visibility with minimal risk.