Are you tired of the limitations and fees imposed by traditional payment systems? Are you looking for a secure way to transact online that doesn’t involve jumping through hoops to get approved? Then you might be interested in the world of crypto eCommerce.
As more and more businesses adopt cryptocurrencies like Bitcoin, Ethereum, and Litecoin, consumers like you have the opportunity to make purchases using these digital assets. Also, unlike credit cards or bank transfers, crypto payments are almost instant and have minimal fees.
Whether you’re a tech-savvy early adopter or looking for a more convenient and secure way to shop online, adopting crypto payments offers something for eCommerce businesses. So why not dive in and discover a new world of digital commerce?
What is Cryptocurrency?
To start, it could help to define what cryptocurrency is. It is a digital currency that the government or bank controls, but instead, it should use encryption techniques that regulate its use and release.
Network users verify every transaction that occurs, and those transactions are generally made public records to prevent the coin from being spent multiple times by the same customer. The key to using cryptocurrencies is recognizing that each coin is unique and that certain coins provide more security and privacy than others.
The goal behind cryptocurrencies is to build a platform that allows users to trade directly without intermediaries like banks or other centralized institutions. The purpose of bringing money closer to people is natural, given those cryptocurrencies were established in 2009, during a severe financial crisis.
Why Should Your eCommerce Brand Adopt Crypto Payments?
Although there are many eCommerce-cryptocurrency benefits, cryptocurrency is not without danger. In any case, the benefits of digital currency outweigh the risks. Implementing cryptocurrency payments for your eCommerce brand allows you to reach more customers and complete cryptocurrency transactions faster. Here is why you should start accepting bitcoin payments:
1. Reach a Broader Market
The logic is straightforward: the more payment options your eCommerce store provides, the greater its attractiveness. Some credit/debit card types are unavailable in all countries, making it more difficult to capitalize on a diverse customer base.
Cryptocurrency is available worldwide and is not controlled by any state or territory, and it is a very stable option. In addition, some customers are bank and credit card averse, and although they are a minority, accepting cryptocurrency payments for your products will expand your eCommerce reach more.
2. Process Transactions Faster
Payment processing times usually vary significantly between banks and credit card platforms and could cause problems to your cash flow.
Credit cards and bank transfers might take hours or even days to process. Bitcoin transactions arrive in your digital wallet in minutes, allowing you to access your funds faster.
3. Get Lower Transaction Fees
Most payment processors and credit card companies can charge up to 5% transaction fees. Bitcoin transaction costs vary but rarely exceed 1.5% for each transaction. This may seem like a reasonable amount. Still, it adds up to significant savings in the long run.
4. Reduce the Risk of Fraud
Many customers applaud cryptocurrency for reducing fraud. This is important because fraudulent chargebacks will affect your brand’s bottom line. Since all cryptocurrencies use a decentralized ledger system, it’s almost impossible to reverse or cancel cryptocurrency transactions once they have been made. This gives merchants more excellent protection against theft or fraud.
In addition, bitcoin transactions are transparent because they are recorded on the blockchain, a publicly accessible digital ledger. Furthermore, because crypto transactions are complicated to reverse, clients cannot withdraw funds from your account without your permission, preventing fraud.
5. For Anonymous Transactions and the Bank-Averse
Unlike fiat currencies, cryptocurrency allows anonymous online purchases using encrypted wallet addresses, which is unmarked cash. This lets your customers purchase things without compromising their personal information, enabling you to conduct business without worrying about privacy regulations.
Disadvantages of Cryptocurrency in eCommerce
There are many drawbacks to allowing cryptocurrency for eCommerce payments.
1. Price Volatility
Accepting cryptocurrency payments exposes you to significant and often unpredictable drops in value. Indeed, your crypto assets could rise in value as well. It all depends on how much danger you are willing to accept and how long you are willing to wait.
Some volatility can be avoided by accepting purchases in stablecoins, which are more stable versions of cryptocurrency whose value is linked to traditional payment methods.
2. Lack of Buyer Protection
Customers understand they are not liable for fraudulent credit card payments, and e-commerce businesses wisely factor a certain number of chargebacks into their projected revenue. No cryptocurrency comes with consumer protection, meaning that the customer loses in the case of eCommerce fraud. This is unless eCommerce brands build up their protections to protect a customer.
3. Environmental Concerns
Perhaps this is a surprise, but cryptocurrency is known for using large amounts of energy to create (or “mine”) coins by validating them on the blockchain. Without getting too technical, this energy usage is big enough that Bitcoin mining and any other currency consumes more electricity per year than the entire country of Argentina.
No company today wants to be “part of the issue” regarding carbon emissions. Thus the energy consideration is one that brands should take seriously.
How to Implement a Crypto Payment System for your eCommerce
There are two ways in which an eCommerce business can accept crypto coins:
- Directly to a personal crypto wallet
- Meditated by fiat to crypto payment gateway
If you decide on a crypto wallet, you can get a physical or a virtual one. Virtual digital wallets are applications that store your coins at a fee, while physical wallets are USB resembling devices. The second choice will be safer since there is no risk of losing coins.
Alternatively, if you prefer a payment processor, you can create one by hiring a developer or choosing from existing options. BitPay and Coinbase are the two most prominent payment processors, but many others exist. The benefit of processors is that they immediately convert crypto coins into real currency, shielding you from crypto value volatility.
In addition, most eCommerce platforms like BigCommerce, Shopify, and WooCommerce have crypto integrations at their app stores.
How Else Can You Use Cryptocurrency in eCommerce?
a). Loyalty Programs
Loyalty programs are not new in eCommerce, but many retailers have fought to keep their existing customers in their programs. Since it’s based on blockchain technology, bitcoin cash is an excellent way to provide a store credit to customers.
Loyalty tokens cannot be lost or stolen since the secure digital ledger arranges your records. Furthermore, because shops cannot change the value of a token while redeeming rewards, the open system promotes confidence.
b). Adding Value to the Customer Experience
Although cryptocurrencies provide highly accurate data records, merchants can use them for reasons other than payment systems. However, cryptocurrencies provide precise, highly data records, and merchants can use them for reasons other than payment systems.
For example, coins or tokens can be used to monitor the manufacturing of the products or garments they carry in their online stores, providing consumers unprecedented transparency into your supply chain. This leads to a better customer experience and, as a result, more loyal customers.
c). Marketplace Expansion
Cryptocurrency has caused significant disruption in the eCommerce sector, with cryptocurrency-only marketplaces such as OpenBazaar gaining popularity. Since they leverage peer-to-peer networks, they provide merchants with security and lower operating expenses.
It’s an excellent option for those looking to extend their selling channels because it has significantly less competition than other marketplaces.
Which Cryptocurrency Payment Gateway Can you Use for your eCommerce Business?
You can use many crypto payment gateways for future eCommerce cryptocurrency transactions. Some of them include CoinBase, CoinGate, SpectroCoin, and BitPay, to name a few.
However, choosing the ideal and reliable cryptocurrency wallet and payment processor is difficult. Since these platforms will hold all of your crypto assets, it is best to do extensive research about them or, better yet, pay a professional to handle them.
Is eCommerce Cryptocurrency Gaining Traction?
Whether or not you accept cryptocurrency payments should depend on your customer base since it’s more popular among technologically inclined customers. However, remember that its use is getting more prevalent, and within a few years, it may be much more popular as a payment method.
Despite the current spike in interest in cryptocurrencies, their usage by small to medium-sized eCommerce businesses has yet to be closely examined. But, as we become more accustomed to the convenience and seamless aspect of digital shopping, cryptocurrency will only become more appealing.
Online shopping has no time or space restrictions, allowing the online consumer base to purchase when and how they choose. Slow or inefficient payment methods will only become more noticeable to consumers as eCommerce platforms work hard to remove friction from the user experience.
Furthermore, since the COVID-19 pandemic, more shoppers have moved online purchases than ever before, which also deepened security concerns. Customers became very worried about falling victim to scams or fraud. Combined with low trust in banking institutions, this set the scene for a significant shift in how consumers viewed the cryptocurrency market.
In fact, according to the Piplsay research conducted in February 2021, 57% of US-based consumers believe that major brands should start accepting cryptocurrencies as a form of payment. With big eCommerce platforms like Shopify now allowing online retailers to take payments through their online stores, cryptocurrency is becoming a viable alternative to fiat currency in the eyes of consumers.
Conclusion on Crypto eCommerce
Crypto eCommerce offers a revolutionary new way to buy and sell online. By using digital currencies, we can enjoy faster transactions, lower fees, and greater security when purchasing from anywhere in the world.
As cryptocurrencies gain mainstream acceptance, more businesses will adopt them as a payment option, allowing consumers like you to make purchases easily and confidently. And with the rise of decentralized marketplaces and peer-to-peer commerce, the possibilities for crypto eCommerce are endless.
So why not take the plunge and use cryptocurrency for your next online purchase? You might be surprised at how easy and convenient it can be. And who knows? With more and more businesses accepting crypto payments daily, we could witness the birth of a new era of digital commerce.