Unless you’ve been living under a rock, you’ve undoubtedly heard of blockchain and cryptocurrencies. The advent of digital wallets is paving the road for more easy and more rapid payment methods, which is altering how we do business. Because bitcoin is instantly translated into local currency for merchants when utilizing a payment processor, taking this method of payment may be rather simple. Despite this, the majority of people have yet to sign up.
Adopting bitcoin as a payment method as an eCommerce merchant selling online can improve your customers’ trips and extend your consumer base by providing more options at the checkout. To begin, here are a few reasons why you should incorporate cryptocurrency payments into your eCommerce business.
What is Cryptocurrency?
To begin, it may be useful to define cryptocurrency. Simply said, Bitcoin is digital money that is not regulated by any bank or government and instead relies on encryption techniques to regulate its usage and create its distribution.
Every transaction that occurs is validated by network users, and those transactions are typically made the public records to prevent the coin from being spent numerous times by the same person. The key to adopting cryptocurrencies is to recognize that each coin is unique and that certain coins provide more security and privacy than others.
Benefits of Cryptocurrency for eCommerce
Let’s take a look at some of the specific benefits of accepting cryptocurrency in your eCommerce store:
Broader Market
Accepting cryptocurrencies as a payment option opens up a whole new market of tech-savvy consumers who have formed a community inside the cryptocurrency market. Giving customers the option to pay with a digital wallet or a credit card platform helps you to tap into larger markets and appeal to customers all over the world.
Fast Transactions
Unlike credit card systems, which take a few days to batch out and process, Bitcoin is handled instantly, allowing you to access payments much faster. Fast transactions can boost your company’s cash flow.
Low Fees
Another advantage of accepting cryptocurrencies as a payment option is the minimal transaction fees. The prices will vary depending on whether you accept cryptocurrencies into your personal wallet or through a third-party provider like Coinbase, but they will almost certainly be substantially lower than the fees charged by services like PayPal or credit card issuers.
Security
If a consumer completes a crypto transaction, it is tough to reverse unless you have the merchant’s permission. This gives shops additional protection against eCommerce fraud since there is no middleman, such as a bank, who may remove cash from your account without your permission.
Drawbacks of Accepting Cryptocurrency
Now, let’s take a look at the drawbacks of using cryptocurrencies in your e-commerce business.
Lack of Universality
Despite the phenomenal surge in cryptocurrency usage and the aforementioned diversification options, it must be stated that cryptocurrencies are far from ubiquitous. While the barrier to entry is decreasing, acquiring cryptocurrencies and purchasing things with them still takes more technical knowledge than using a credit or debit card.
There is also a plethora of cryptocurrencies available for buyers and merchants to pick from, with hundreds of new coins entering the market in the first half of this year. You might spend a lot of time and money taking payments for one currency only to discover that its popularity has plummeted in favor of the next great thing, and no one wants to use it anymore. Keep in mind that there is only one dollar. Okay, more than one, but you get the idea.
Volatility
Even if you last checked the dollar-euro exchange rate a few months ago, you could probably make a good estimate as to what it is now. Not so with cryptocurrency. Bitcoin’s price dropped from $60,000 in April to $30,000 just two months later. With such large variations in value occurring on a regular basis (actually, Bitcoin is more stable than a lot of other coins), eCommerce retailers are at risk of losing money if they are not cautious.
Volatility makes pricing things challenging, and it can make dealing with returns of items purchased with cryptocurrency much more problematic. As a result, many shops that take cryptocurrencies post prices in US dollars and match the dollar price for returns. Which appears to be so time-consuming that it begs the question, “Is it worth it if I’m selling returnable goods?”
Top Cryptocurrencies to be Aware of
Digital currencies are a volatile market, with new currencies being introduced on a weekly basis and existing currencies continuously losing and gaining value. According to the most recent crypto economy news, the following cryptocurrencies rank first in terms of market capitalization:
Bitcoin
Bitcoin is the original cryptocurrency. Before it became a reality, Satoshi Nakamoto outlined the concept in a paper titled “A Peer-to-Peer Electronic Cash System” in 2008. Through a digital transaction system, Nakamoto sought to decentralize the financial industry and return authority to the people.
Ethereum
Ethereum was a currency developed in response to the development of bitcoin. Its founder, Vitalik Buterin, aspired to create a platform that would completely revolutionize the internet. He envisioned Ethereum as a platform that could be used for more than just financial transactions, as Bitcoin now enables. The Ethereum platform is now a location for developers to construct decentralized apps like contracts or codes without the need for third-party platforms.
Dogecoin
Dogecoin originated as a joke by software programmers Billy Markus and Jackson Palmer and has now evolved into a legitimate currency in its own right. Dogecoin, based on the Doge meme, has developed from a sarcastic remark on cryptocurrencies into a viable investment option that has grown in popularity well beyond its creators’ expectations. Some still look down on it, but backing from people like Elon Musk has caused Dogecoin to be taken seriously.
XRP (Ripple)
XRP, commonly known as Ripple, is a self-contained digital asset stored in the decentralized cryptographic XRP Ledger, which is managed by a network of peer-to-peer servers. XRP was created to let users transmit money digitally without incurring the high transaction costs and conversion periods associated with bitcoin. XRP is a currency that can be purchased and traded openly, and it allows users to transmit money swiftly and securely all over the world. XRP is sometimes mistaken for its inventor, Ripple Labs, however, it should be noted that the currency is entirely autonomous.
Bitcoin Cash
While Bitcoin Cash is quite similar to Bitcoin, there are significant characteristics that distinguish them. By raising the size of the blocks, Bitcoin Cash enables for more transactions to be executed. Bitcoin Cash intends to compete with industry heavyweights like Visa and PayPal by expanding the volume of transactions.
Mobecls team provides a wide range of eCommerce development services, starting from SEO and design to custom functionality development. Our 10+ years of Magento expertise allow us to provide unique eCommerce solutions taking into account industry and business specifics. If you want to take your business to the next level, we’re ready to help!
