With the growth of new digital technologies, eCommerce has exploded. In 2020 alone, eCommerce sales reached $4.3 trillion. Despite new technology and market growth, eCommerce businesses still face downsides from legacy systems, particularly traditional payment processing options that haven’t fully adapted to a new global, online market. While new payment processors oriented specifically towards eCommerce, such as Stripe and PayPal, have entered the market, they mirror problems associated with traditional payment processors, including high fees, limitations to market expansion, processing times and security of transactions.
Cryptocurrency was created precisely to solve these types of problems. It is a decentralized digital currency that can be used for peer-to-peer exchanges outside of traditional payment networks. With the rise of Bitcoin and the proliferation of competitors, cryptocurrency is entering into the mainstream, with the blockchain market size estimated to hit $17 trillion by 2025. Given the problems crypto was intended to solve, it offers tremendous possibilities for eCommerce businesses to expand their markets, while also lowering overhead costs. Here are just a few of the benefits that cryptocurrency can bring to your eCommerce business.
While traditional payment options are convenient, they are also expensive. Exactly how much you will pay depends on what industry you are in. High-risk payment industries, such as gaming, pay as much as 10% per transaction. Even if you aren’t in a high-risk industry, basic ecommerce payment processing can cost as much as 5% per transaction, plus additional flat fees. With blockchain technology, crypto payments can reduce these fees below 3%, including being as low as 0%, per transaction.
Expanding to global markets can be difficult. To begin with, you have to deal with currency exchange. That means you’re now dealing with currency exchange processors that charge foreign transaction and conversion fees that can be as high as 4x the actual conversion rate. Settling foreign currency transactions also lead to delays in settlement for payments, as customer payments have to make their way through a network of processors. Finally, there is the problem of the nationally bound nature of credit cards. Because they are regionally based, customers in countries other than your home base can often have their credit card payments declined. Crypto payments are the electronic equivalent of cash transactions. That means that customers in foreign markets transfer crypto directly to you, which cuts out intermediaries and the fees, processing times and restrictions that they impose on transactions.
Crypto is encrypted and provides security at different levels. To begin with, the transaction itself is secure. Because it is encrypted and the exchange process doesn’t involve information being exchanged publicly, it cannot be hacked. Moreover, because the transaction is virtually instantaneous, the customer cannot fraudulently reverse or cancel the transaction as they can when payment processors take days to process transactions, during which time the customer has already received a product or it has been shipped. Likewise, crypto provides security because it removes the need to store customer payment information, which makes eCommerce a target of hackers. Each transaction is like an exchange of paper currency: it is direct and unique and therefore does not require any customer information to be completed.
Adopting crypto does not mean ending traditional payment options – crypto and credit or bank card payments are not mutually exclusive. With state-of-the-art blockchain technology, crypto payments can be integrated into your website while you continue to offer credit card. Moreover, with state-of-the-art blockchain technology, offering crypto payments allows customers to pay with multiple cryptos. Adopting crypto simply means offering customers more payment options than traditional payment processors accept. This allows you to increase your market, catering to younger tech savvy customers who are increasingly using crypto as their currency of choice.
While crypto offers these benefits for ecommerce, it also presents two downsides – solutions that RocketFuel is innovating to overcome.
All currencies experience fluctuation. But crypto is more volatile than fiat currencies. Certainly, when the value of crypto goes up, you can profit from accepting crypto payments. But when the value goes down, it creates a problem. Crypto can decrease in value in the few hours between when a customer completes a purchase and your blockchain software transfers you the funds. This means that you’re receiving less than the market value for your product. To protect against fluctuations, RocketFuel offers an industry first, the Price Settlement Guarantee, which locks in the price at the time of purchase and settles the transaction at that rate. That means you’ll be paid in full despite any potential short-term fluctuations.
Centralized payment methods, like credit cards, offer incentives for payment, like points or discounts. Customers often want to pay with cards precisely for this reason: they want to gain points to pay for their next vacation or to get payment cards for specific stores. Because crypto is decentralized and operates like money, it generally can’t offer these advantages, which disincentives customers from paying with it, especially for recurring bills. To bring these same benefits to crypto use, RocketFuel is offering a new crypto token to incentivize purchasing products using crypto and other payment options with its blockchain technology. With these tokens, RocketFuel customers can redeem, unlock and purchase additional services and products like airline upgrades, hotel bookings, concerts, sports events, and other benefits.
Fully capitalizing on crypto’s possibilities requires state of the art blockchain technology. It’s time for eCommerce to leverage the full potential of digital technologies and adopt crypto as an additional payment option. RocketFuel’s next generation blockchain technology offers a low-fee, hassle-free crypto payment solution that accepts more than 50 cryptocurrencies. With its Price Settlement Guarantee and crypto tokens, it also provides the stability and loyalty associated with traditional payment options. Right now, we’re running an early adopters’ program: Sign up now for 0% fees, 0 chargebacks and 0 card declines.