The year 2009 paved the way to something that has gained immense popularity in recent years. It’s a frequent topic of discussion and has created a lot of buzz. This subject is what we call cryptocurrency.
What is cryptocurrency?
In simple words, a cryptocurrency is a form of digital payment based on complex encryption. It can be exchanged amongst its users for goods and services. In opposition to cash which has a fixed value, many investors consider this as an asset with a variable value.
A major point about cryptocurrencies is that they have decentralized control. This means, unlike traditional currencies, it’s not controlled by any centralized authority like banks and governments. Consequently, transactions are verified by a decentralized network of thousands of computers without a central server. Encryption techniques are used to control their use and manage their release.
Some popular cryptocurrencies include Bitcoin, Ethereum, Litecoin, and Ripple.
A pseudonymous (possibly) developer Satoshi Nakamoto created the first decentralized cryptocurrency in 2009. Since then, the currency has witnessed many fluctuations. However, it has gained admirable credibility now. The use of cryptocurrency in e-commerce is proof of the same.
Who is accepting cryptocurrency?
Many major companies across the world accept cryptocurrency. This includes PayPal. The financial technology company intended to draw businesses to its platforms. Additionally, bitcoin’s transaction fees were lower than the profit-making 2%-3% charge that businesses paid for credit card transactions.
The Online electronics giant NewEgg also accepts bitcoin. While many platforms require you to convert crypto to cash through a third-party service, NewEgg lets you pay instantly. Shoppers buying through a computer have to choose the “Pay With Bitcoin”. Following this, they have to go through the motions of shipping.
Additionally, Amazon-owned Whole Foods and Twitch now accept cryptocurrency, not just bitcoin. Moreover, this list of companies accepting this new currency includes big names like Starbucks, Microsoft, Etsy, Overstock, Home Depot; etc.
Why are E-commerce platforms introducing cryptocurrency payment options?
The digital revolution has severely impacted our lives. In the business domain, the rise of E-commerce has led to the rise of digital wallets. This is a more convenient and instant payment option. Considering Cyptocurrency is automatically converted into local currency merchants when using a payment processor, introducing this payment option can be seamless. However, still many E-commerce players are yet to adopt this form of payment.
It is imperative for E-Commerce retailers to understand how adopting cryptocurrency as a payment method can offer multiple benefits. Consequently, it can help to foster growth in your business.
Reasons to introduce this payment method
Here are some reasons to introduce cryptocurrency as a payment method in your E-Commerce website:
Introducing cryptocurrency as a payment method will enhance the purchasing power of tech-savvy consumers who have a community within the cryptocurrency market. Consequently, it will help in expanding your market.
Moreover, a digital wallet allows you to dive into broader markets and attract customers from all around the world.
Traditional transaction systems like credit cards take a few days to process. Whereas the blockchain technology of cryptocurrency enables faster and more direct transactions. This will allow you to streamline your business cash flow.
On the other hand, the immediate processing of cryptocurrency is also beneficial for customers. It means their orders can be shipped instantaneously. This in turn enhances their shopping experience and satisfies a modern customer’s demand for faster delivery.
E-commerce sellers pay a significant charge for credit cards. The transaction fees for cryptocurrency will depend on whether you accept it through your personal waller or through a third-party provider. However, it will be less than services like Paypal or as mentioned earlier credit card providers. Hence, cryptocurrencies have lower transaction costs.
Consequently, this makes business more profitable.
Following a transaction carried with cryptocurrency, it becomes difficult to reverse without the approval of the merchant. Since there is no middle authority like a bank that can withdraw the funds from your account without your consent, retailers are assured of more security from E-Commerce fraud.
Carrying anonymous transactions
Cryptocurrency is like unmarked cash. It allows making anonymous purchases by using encrypted wallet addresses. Basically, this allows customers to make purchases while not comprising their personal information. Additionally, you can do your business without any concerns about privacy regulations.
How can you accept cryptocurrency payments on your e-commerce site?
There are two options you can use for introducing this mode of payment:
- Through third-party processors: There are many third-party services that can process transactions on your behalf. Some examples of these can be BitPay, Coinbase, or NOWpayments. A Shopify merchant can start accepting cryptocurrency by enabling one or more alternative payment methods from the ‘Payment Providers’ page of their Shopify admin. Once this option is enabled, they can accept more than 300 digital currencies.
- Paying through a personal wallet: Through this option, you can receive payments directly to your personal digital wallet. This can be stored on your smartphone, computer, or hard drive.
If you decide to add cryptocurrency as a method of payment in your online store, there are some things you need to keep in mind. Ensure the security of your system, transaction, and funds. In order to enhance security, use strong passwords and multi-factor authentication for your crypto exchanges and wallets. Additionally, regularly update, backup, and encrypt your systems and wallet.
One should keep these funds in cold storage if they are vital to their business. This means keeping an offline Bitcoin wallet like a flash drive. However, don’t keep large amounts in the wallet for a long period of time.
If this new concept seems confusing, remember that cryptocurrency has an immense possibility of transforming E-commerce and international trade. Most importantly, adopting cryptocurrency has benefits for both the customers and businesses. So, keep up with the latest practice in the e-Commerce industry and adopt cryptocurrency today.
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