Is It Wise for E-Commerce Stores to Accept Crypto As Payment?

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Everyone is aware of crypto these days. Once obscure, these digital assets are quickly becoming mainstream, especially in the realm of e-commerce. The industry is projected to grow from its previous perception as a niche investment for tech enthusiasts to $2.9 billion by 2030.

The increasing digitization of various aspects of life requires the recognition of virtual currency as an authentic asset and not just a passing fad. This article will look at why the e-commerce industry is open to accepting crypto as a viable payment solution, and what benefits it provides.

Potential of crypto payments

The unpredictable adoption rates of cryptocurrencies make estimating the size of the market difficult. The Global Cryptocurrency Adoption Index shows that adoption peaked in the second quarter of 2021. However, affected by economic concerns and market volatility, cryptocurrency ownership continued to witness significant fluctuations.

According to statistics, crypto ownership rates for adults in the United States have fallen slightly from 33% in 2022 to 30% in 2023. However, with 60% of respondents saying they are familiar with the idea, it seems to have a good chance the use of digital currencies will grow as the technology becomes more widely available.

However, cryptocurrency usage is still quite low. According to the same survey, 38% of cryptocurrency users were attracted to the technology, while only 13% of users bought crypto for use in online transactions.

E-commerce aims to overcome the shortcomings of conventional payment methods to improve the user experience. As online commerce needs change, cryptocurrencies represent a viable way to make transactions faster. This, and declining trust in conventional institutions, suggests that future perceptions and use of cryptocurrencies may be changing.

Advantages of cryptocurrency in e-commerce

Using cryptocurrency for payments gives e-commerce companies a number of advantages over competitors:

Improved global reach

E-commerce sites can reach a wider audience worldwide with cryptocurrencies. Conventional payment options not always available everywhere and may have regional restrictions. Companies looking to host cross border businesses often choose to use cryptocurrencies due to their ease of use and lack of global regulation.

Lower costs

Businesses can avoid the high fees associated with using credit cards by accepting cryptocurrencies. Customers and businesses could save money as a result of the typically lower fees associated with digital asset transactions, which would lower the cost of goods and services.

Greater safety

Transactions using cryptocurrencies are very secure as they are decentralized. Since the transaction is almost impossible to reverse once completed, the likelihood of fraud is greatly reduced. The adoption of blockchain technology provides an additional layer of protection against chargebacks and fraudulent activities, protecting merchants and customers in the online marketplace.

Cryptocurrency Applications in E-Commerce

A wide range of e-commerce applications are feasible with cryptocurrency:

  • Loyalty programs: The innovative and secure benefits that customers can now enjoy as a result of blockchain technology increase the appeal of loyalty programs. Benefits such as loyalty tokens are guaranteed to be fair and secure due to the immutability of blockchain technology, increasing engagement and trust.

  • Web 3.0 and Metaverse: With its immersive buying experience, cryptocurrency is a key component of both Web 3.0 and the metaverse. It improves user engagement by facilitating transactions for virtual money and collectibles.

  • Supply chain transparency: Supply chain integrity and product manufacturing can be transparently verified using blockchain for traceability. This underscores the brand’s commitment to integrity in the fight against counterfeit goods and unscrupulous business practices.

  • Specialized markets: With the advent of virtual assets, specialized markets were created on peer-to-peer networks. These platforms give merchants new chances to reach a wider audience and increase their market presence by providing safer transactions and lower operational costs.

Concluding remarks

Companies that accept crypto as payment have a unique opportunity to gain a lot from this technology and other innovations in the industry. In addition to the advantages mentioned earlier, the use of cryptocurrency for payments has a huge potential to grow the e-commerce sector.

Image source: Shutterstock

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