Welcome to Part 4 in a series of articles on Cryptocurrency in Business. In our first three articles we’ve covered Cryptocurrency basics, Blockchain and potential business applications. In this final article in the series, we’re looking at crypto payments.
WHAT’S HAPPENING IN THE PAYMENTS SPACE?
Research clearly shows that cash transactions in developed countries are in steady decline, for example Euromonitor International reports that in 2016 consumer card payments surpassed cash payments for the first time in history. The mass adoption first of card payments, then contactless card payments, then smartphone payments, transactions on social media platforms, payment by a simple text message and more changes to come shows that the days of cash as a regular medium of exchange are numbered.
In response to this development of reduced cash transactions, a logical question to ask is “What’s next in the payments space?” And the next big development is crypto.
ADOPTION OF CRYPTOCURRENCIES
As covered in Part 1 in this series of articles, Bitcoin came onto the scene in 2009, with little fanfare. Cryptocurrencies burst into the public consciousness in 2017 with Bitcoin’s meteoric rise in value, along with a multitude of other cryptos. Whilst awareness of crypto has grown dramatically, understanding is still developing. As the market develops, the adoption rate of cryptos is expected to increase dramatically, particularly as new crypto developers learn from the successes, failures and limitations of all those cryptos that have launched onto the market already.
Given the limitations of traditional fiat currencies and the benefits of crypto, it seems it will be only a matter of time before crypto becomes a true medium of exchange among the mass market.
SHOULD YOU ACCEPT CRYPTO PAYMENTS IN YOUR BUSINESS?
If someone asked me to come up with some fundamental rules of business, one that I would put right up near the top of the list would be:
Make things as easy as possible for your customers to give you money.
One of your key objectives should be to remove all barriers to a sale. Research collected from customer surveys shows that many survey respondents have reported abandoning a purchase because a shop, supplier or tradesman did not accept a card payment. Perhaps this could extend in the future to customers dealing in crypto, who may not have cash or a credit card on them, who expect to be able to pay from their crypto funds.
One of the key benefits of crypto is their global reach, unbound by national borders. Imagine a future where world travellers don’t need to purchase any local currency, but instead they have a single currency that is accepted around the world. Allowing those people to spend money with you in your business makes a whole lot of sense!
CRYPTO PAYMENT OPTIONS
The activity in the payments space in recent years has been frantic, and there is more to come in the crypto world. Indications are that some significant firms such as Expedia, Overstock.com and Shopify accept crypto payments along with many other business, but that the extremely high volatility of crypto prices may be affecting the uptake. It’s fair to say it’s a work in progress that is changing very rapidly.
The most common cryptos right now that are being accepted for payments include Bitcoin, Bitcoin Cash, Litecoin and Ethereum. More options such as Ripple and Dash and other popular cryptos are likely to come on stream in the near future.
If you decide that you do want to start accepting crypto payments in your business, there are basically three options available to you at the moment:
- Direct e-wallet to e-wallet transfers that can be done without any additional hardware or systems to set up. QR codes can be created by the merchant, so that the customer just scans the QR code with their phone and that will take them direct to the merchant’s e-wallet
- Set up a specific payment system that can accept crypto, such as Rocketr or ClickDirectPay
- Accept crypto without even knowing you’re doing it!
The third option in the list above seems to be the most attractive one. This is made possible by crypto developers creating a system whereby their account holders can pay using the existing Point of Sale terminals built on the conventional Visa, Mastercard and EFTPOS banking network, which includes more than 40 million terminals around the world.
This type of payment option will allow those of your customers who have the appropriate crypto accounts to pay you on your existing payment terminals using the crypto of their choice, which will be automatically converted to your local fiat currency and paid into your account. You won’t even be aware that you’ve just been paid in crypto, because you will have received the nominated sale amount in your designated currency.
Accepting crypto payments in your business could open up a world of opportunity – and it might soon be a whole lot easier than you thought it would be.