Expanding the Market for SaaS Platforms with Crypto Payment Solutions

Cryptocurrency, until recently, was regarded by many simply as a buzzword. This status has prevented cryptos from tussling their way into the mainstream payment system. However, times are changing - more than 100 countries are currently exploring the development of central bank digital currencies (CBDCs), suggesting that cryptocurrencies may soon enjoy the same recognition as fiat currency. This shift was perhaps inevitable given cryptocurrency’s popularity explosion across the last decade, with the value of global crypto assets recently surpassing $1.7 trillion (US).

Blog Banner - Book A DemoCryptocurrencies were designed to address many of the historic aches associated with traditional payment methods, and represent significant opportunities for growth for industries with tech-oriented customers. Payments routed through the centralized banking system are starting to lag behind in terms of service standards in the internet era. Customers expect shopping experiences to be efficient, convenient and seamless. This means protecting privacy throughout transactions, being able to shop when and where it suits, and tailoring payment solutions. Integrating cryptocurrencies into your payment network expands the market for your business, lowers costs, and helps create a sleek and customizable user experience.

The Limitations of Traditional Payment Solutions

Customer Exclusion

It is telling that up to 90% of Bitcoin owners use the currency primarily for investing or saving rather than day-to-day purchases. While this may be owing partly to Bitcoin (and cryptocurrency in general) being viewed mainly as a commodity, it is surely due in part to sparse adoption as a mainstream payment medium. Perceptions of cryptocurrency are changing, however, and so is its share of the market. 16% of adult Americans have invested in, traded, or used a cryptocurrency, with this number as high as 43% in American men aged 18 to 29. The average crypto user is young, well-educated, and tech-friendly – and now represents a significant sub-section of the consumer base.

Industries whose products are favored by younger and more tech-forward demographics may be inadvertently excluding potential customers by only supporting mainstream payment methods. This is especially pertinent for domain-hosting, VPN, and other SaaS (software as a service) businesses. Customers in these markets may be more likely to have assets stored as cryptocurrency, but are unable to use them for day-to-day purchases. Similarly, ‘unbanked’ populations could be prevented from interacting due to a lack of access to mainstream banking. This is also true of ‘underbanked’ populations, made up of younger and non-white demographics. The exclusion of payment options outside of traditional payment networks alienates these individuals and excludes their custom.

Card Declines 

As a mechanism to prevent fraud, many credit cards cannot be used for cross-border purchases and will decline when an international transaction is attempted. Card declines are costly and laborious to remedy, and can often strain relations between business and customer. To this effect, Profitwell notes that amongst B2B subscription businesses, card declines were the largest source of customer churn. Restricting use of cards by region can seriously limit the market a business is able to interact with and presents a remediation cost in cases of card decline.

Network of lights
High Merchant Fees and Fraud Risk

Additionally, fees for merchants who rely on traditional payment channels to do business are often high. Credit card transaction fees can range anywhere from 3-7% as standard, representing a significant overhead for any business. The fund-clearing processes for these transactions also present a dangerous window for chargebacks and fraud to occur. This happens when a buyer uses this processing window to fraudulently reverse a payment after an order is placed or shipped. Furthermore, businesses operating in designated 'high-risk' sectors, such as cannabis and adult entertainment, are penalized through higher payment processing fees to subsidize the risk of defrauding, or may be forced to do all of their business in cash.

The Benefits of Cryptocurrency as a Payment Solution

The financial needs of customers and businesses are changing, with an emphasis on convenience, privacy, and flexibility. Cryptocurrencies are designed to service these needs and can empower both businesses and customers alike.

Recurring Billing Support
A crypto-related grievance is lack of support for recurring bill payments. Bill payments are known as ‘pull’ interactions. Once a payment order is established, businesses can retrieve funds from customers and ensure payment is provided for an ongoing service. Crypto operates using ‘push’ technology, meaning a business cannot withdraw funds from a customer but only request that a transaction be initiated. This would be problematic for businesses that operate on a subscription model, such as SaaS providers. However, select crypto payment processors, such as Rocketfuel, have recognized this problem and integrated recurring billing support into their systems - allowing businesses to accept payment for subscription services via crypto.
Market Expansion and Customer Relations

As well as reducing overheads and improving margins, integrating crypto payments may profit a business by opening up untapped segments of the market. Cryptocurrencies are not confined for use by region, and can be used freely to make cross-border purchases. Crypto, therefore, represents an opportunity for payment processors as well as businesses to expand their markets – meaning service providers can work with vendors outside of their region, and businesses can sell to customers further away. The removal of card decline risk also streamlines the transaction process and encourages repeat business and positive customer relations.

Integrating crypto into an existing payment network may help your business to stand out from its competitors. Underbanked demographics outside of the banking system are able to make purchases through crypto simply by owning a phone. Accepting crypto payments allows businesses to tap into this market and differentiate from other providers. Being able to pay in crypto may be a pull factor for younger and tech-savvy customers, who are more likely to be involved with cryptocurrency at some level. This is particularly useful for businesses based in tech such as domain-hosting and SaaS providers, whose customers may be more discerning when it comes to the availability of tech-friendly solutions.
Low Fees

A major incentive for businesses to adopt crypto payments is the reduction in merchant fees. The lack of alternative payment methods has forced many businesses to accept excessive transaction fees as an unavoidable overhead. However, crypto payments come at a far lower cost per transaction with merchant fees as low as 1%. Reducing operating costs for everyday payments creates breathing room for investment in other areas of the business, as well as an opportunity to pass savings onto customers.

Payment Security

As well as this cost-saving, accepting payments in cryptocurrency removes the risk of chargeback fraud. Funds are moved near-instantaneously from customer to merchant, closing the window for any illegitimate payment reversals. Transactions are encrypted, protecting data, and oversight of payments stays with vendors. This mitigates the risk of chargebacks, thereby improving relations with customers and payment handlers.

Rocketfuel: a One-Click Payment Solution

Rocketfuel Blockchain provides a one-click checkout solution for cryptocurrency payment processing. Our payment solutions integrate seamlessly with your existing payment network and omni-commerce channels, reducing friction at every touch-point and providing a slick user experience. Rocketfuel eliminates payment redirects, reducing cart abandonment and creating a seamless and reliable checkout experience. Expand payment possibilities for your business by accepting payments in over 120 cryptocurrencies, and receive deposits in either fiat or crypto. Additionally, through Rocketfuel integration, your subscription business can support recurring billing payments in crypto, pulling in new customers and retaining existing business.

Use our detailed metrics to analyze your business flows, or enjoy comprehensive oversight of your merchant portfolio with our feature-rich merchant dashboard. We secure your payments by removing the risk of volatility from settlements – always receive $100 for your $100 product. Enjoy the freedom of lower costs at all levels of your business with 1% merchant fees, and provide frictionless sales without chargebacks or card declines. Consult with us today to see how Rocketfuel can open up the market for your business.

Blog Banner - Book A Demo

Back to Blog

Related Articles

Freedom to Innovate: Empowering Merchants & Shoppers with Crypto Payments Options

Crypto Payments offer Merchants FREEDOM from high fees, chargebacks, card declines, and...

Crypto Payments for Web Hosting and VPN Services: Privacy and Security for Customers, Decreased Overhead for Companies

Increasingly, cryptocurrency is becoming the currency of choice for tech-savvy individuals. As a...

Accepting In-Store Crypto Payments with POS Integration

In 2020 digital wallets accounted for 44.5% of e-commerce transaction volume. What’s more, digital...
Icon For Arrow-up