A study conducted in late 2020 states that over 2,200 US businesses have already accepted bitcoin. This figure doesn’t include bitcoin ATMs. The increasing number of companies using cryptocurrencies such as bitcoin for various purposes has raised the bar for acceptance. Due to the increasing acceptance of cryptocurrencies, the payment landscape is starting to change. Although it isn’t a new form of money, it provides a more flexible and personalized approach to how consumers pay. However, crypto adoption is still in its infancy and there is more work that needs to be done to increase the number of crypto users.
How Merchants Can Boost Adoption
One of the moves to make this happen could be promoting the purchase of products and services through cryptos. By making sure that people can pay for their day-to-day services through them, it gives customers exposure to the various benefits that cryptos provide, and hence, boosting adoption.
Several reasons promoting the purchase of products and services through cryptos can boost adoption. Let’s dive in:
One of the biggest advantages of cryptocurrencies is that, unlike traditional financial institutions, they do not require a middleman to process transactions. Peer-to-peer (P2P) purchasing eliminates the need for a middleman and allows merchants to lower their transaction costs.
Consumers do not also suffer a direct impact if the financial system is compromised. If a bank’s database were hacked, it would be incredibly hard to recover all the details that were lost or stolen. However, with cryptocurrencies, the remaining pieces of information would still be able to confirm transactions.
Access to New Markets and Demographics
In the US, almost 7% of the adult population is unbanked. Worldwide, over two billion people also don’t have access to traditional financial services. With cryptocurrencies, people can now get access to financial services without an intermediary.
Bitcoin is not just about democratizing currency, it’s also about making it easier for businesses to reach out to a wider audience. This allows them to expand their reach and provide more opportunities to sell and hence more customers can access cryptos.
Instant Access to Funds
The general distrust of financial institutions and corporate values is at an all-time high, which is contributing to the rise of cryptocurrencies. Similar to the public’s reluctance to put all their eggs in one basket, businesses also face these same concerns.
When you offer payment methods through cryptocurrencies, you can benefit from the ease of transactions and the efficiency of the process. This eliminates the need for a middleman and allows both the merchant and the customer to have a permanent record.
Cheap Transaction Fees
One of the main advantages of cryptocurrencies is that they have a low transaction fee when making transfers compared to the fees banks and other intermediaries typically charge when dealing with transactions.
Besides being charged for transactions, merchants also have to pay various fees, such as setup and transaction fees. For instance, PayPal typically charges around 4% for each transaction. On the other hand, Bitcoin exchanges typically charge around 1%.
If you’re a business that serves customers in other countries, cryptocurrencies can help minimize the fees associated with international payments because they aren’t tied to a country of origin. As a result, there are more people who will prefer making purchases hence boosting crypto adoption.
High Transaction Speed
When it comes to making a financial transaction, the speed of the transaction is very important. That allows the user to complete the transaction quickly and efficiently.
Unfortunately, the traditional banking system can take a long time to transfer funds from one account to another. That is mainly due to the security clearance required for transferring funds. Unlike the traditional banking system, the speed of cryptocurrency transfers is very fast. It only takes a few minutes to complete a transaction.
In addition, cryptocurrency transfers are not affected by the failure of a central system. They can be made available 24 hours a day and can be accessed even on weekends and holidays. However, delays in payments or account lockouts can occur in a traditional banking system, further delaying the funds’ transfer.
Consumers’ confidence and comfort in the technology are highly related to the reliability of the platform and its transparency. The strong government regulations and the perceived trustworthiness of the technology are also beneficial factors for cryptocurrency adoption.
For crypto transactions, they are all stored in a public ledger, and users can access them. Also, users can see the history of their transactions from the beginning to the present. This transparency allows them to make informed decisions regarding their transactions and to make confirmations, which is highly attractive to consumers.
The term “cryptography” refers to a method of encrypting private keys and sensitive data, from whence the term “cryptocurrency” was coined. Private keys are provided to cryptocurrency holders to secure ownership and access to its blockchain.
Customers must select their digital wallet and authorize the transaction when they pay using cryptocurrency. No sensitive information is required, similar to how credit card transactions are handled. Customers tend to feel safer when transacting in such a manner and hence, it is a good move to prevent fraud protection.
Due to the nature of cryptocurrencies, their anonymity has become a critical feature in the financial industry. They have been able to attract a wide range of customers due to this feature.
Bitcoin and other similar digital coins have pseudonymity, meaning all transactions are recorded. The identities of the receivers and senders are kept private using a digital code known as a “public key.” Notably, their identities are only revealed when they try to cash out their coins at an exchange.
Cryptocurrency Payments in the Future
Due to the widespread acceptance of cryptocurrency among prominent industry leaders such as Wikipedia, and Microsoft, merchants should be at the forefront of this new payment technology. It is expected that this innovation will continue to improve the way customers pay.
As we have discussed, there are various advantages of using cryptocurrencies as a payment processing method. These include lower fees, faster cash flow, and increased fraud protection. With the increasing number of digital currencies becoming more prevalent, it is now more important than ever for merchants to step up their efforts to bridge the gap between their customers’ expectations and their current business. Through cryptocurrencies, merchants can expand their reach and reach more customers, boosting crypto adoption.