Challenges of Adopting Crypto Payments
A primary concern for merchants looking to adopt cryptocurrency into their payment network is the lack of regulation. One of the principal benefits of cryptocurrency is its decentralization – with the upshot being that, at present, there is very little regulation governing the use of cryptocurrencies as legal tender. This means that crypto assets are not protected by financial legislation, creating a degree of risk in their handling. This vulnerability, as well as potential weak points in the security of blockchain networks, leads to value volatility. This is a major area of concern in crypto payment adoption for merchants weighing the benefits of accepting crypto payments for their goods or services. While it is true that mainstream financial institutions are also vulnerable to attacks from malicious cyber actors, their assets are regulated and protected by centralized governments, making them a secure and stable medium of exchange.
Scalability and User Experience
A less serious concern on the customer side relates to the user experience of paying with crypto. Penser notes the process of having to log into (possibly multiple) crypto wallets in order to use cryptocurrency assets in payments as tedious and burdensome, and far less convenient than paying with credit or debit cards – methods that are widely supported, as well as being quick and easy to use at checkout.
Additionally, the poor scalability of various cryptocurrencies in relation to mainstream payment networks is hampering widespread adoption. Mainstream payment processing networks can process more transactions per second than blockchain networks, representing a more scalable payment solution for growing or large businesses. In order to achieve widespread adoption and usage as an everyday payment medium, cryptocurrency needs to catch up to fiat currency in terms of scalability.
Advantages for Merchants of Early Crypto Payment Adoption
Reduction in Fraud
While credit card fraud had already previously been a significant and costly problem for businesses, incidences of payment fraud increased substantially over the course of the pandemic – becoming more of a danger than ever. The dollar value of attempted fraudulent transactions rose 35% in April 2020 when compared with the same period the year before, and small businesses are victimized most often by this type of financial crime. One of the principal benefits of cryptocurrency in this regard is that payments are final and irreversible unless a refund is issued by the merchant. This eliminates the risk of chargebacks and payment reversals and keeps payment oversight with merchants.
Opening New Markets
Despite volatility risks and a lack of regulation hampering crypto payment adoption among merchants, early adopters stand to reap massive benefits from getting ahead of the curve. In a survey of 110,000 Crypto.com users, 75% registered an interest in paying for goods and services with their crypto assets. This interest was distributed evenly among industries also – showing that many types of business stand to benefit from bringing crypto payments into their infrastructure.
In a similar vein, reports are revealing changing tastes in how customers pay for goods and services. As older workers retire and younger generations step into the workforce, payment preferences are shifting towards digital payments. Crypto and digital payments represent a more customer-centric and device-forward payment dynamic, placing a premium on convenience and flexibility for customers. Expanding offerings to appeal to this demographic would be prudent, especially when taking account of the growing statistics – over one third of consumers aged 18 to 54 own crypto assets, and 70% of these individuals would use them to make payments if the option was made available. Expanding on these figures, 54% of current or former crypto owners belong to Generation Z – showcasing a sizable and growing preference for digital payments among younger consumers. Retail in particular represents a profitable frontier for businesses able to accommodate digital payments at in-store locations. Projections expect the value of blockchain retail purchases to increase to $4.6 billion by 2028, presenting a significant opportunity for businesses able to tap into this segment of the market.
Despite expanding crypto ownership and growing demand for merchants to support digital payments, adoption rates among businesses are lagging. Incorporating crypto payments into your payment infrastructure enables your business to tap into younger and tech-forward demographics, as well as presenting the opportunity to get ahead of the curve and help to define best practices in the changing payment landscape. Small businesses contribute as much as 43.5% of GDP in the US – these are the institutions consumers interact with most, and can drive change through bringing crypto payments into the fold.
RocketFuel’s No Risk, One Check-Out Solution
Handling cryptocurrency can come with some risk, but also presents significant opportunities in expanding your customer base and providing excellent customer service in allowing patrons to pay in their preferred currency. Here at RocketFuel, we assume all volatility risk so that you don’t have to. Your customers can pay in any of 120+ cryptocurrencies and you can be paid out in your fiat currency of choice. Our one-click checkout solution makes the tediousness of managing crypto wallets a thing of the past. Contact us today to see how our checkout interface can provide quick and painless checkout for your customers, and same-day settlement for your business.