The role of cryptocurrency in ecommerce is one that needs to be investigated because crypto assets are gaining prominence every day. What were considered earlier as fringe assets only is now on the buy-list of almost all tech savvy investors. As more and more big brands and payment processors start embracing the crypto, it is only a matter of time before online retailers adopt it. So, whether you are a new ecommerce retailer testing the crypto waters or firmly believe in the benefits of integrating crypto payment services for your customers, you need to know certain things.
Cryptos are based on the blockchain which is a distributed ledger system for making encrypted secure payments between parties. All transactions are verified and validated by a group of miners and then added to the blockchain. This means that there cannot be “double spending”; neither can the cryptos or tokens be stolen or duplicated. Unlike traditional payment solutions where the bank controlled transfers, cryptos are verified by many users and there is no bank or government control.
Reasons for the rise of cryptos in ecommerce:
- Bigger audience: When you allow your customers to pay in cryptos, you introduce another payment option that is both secure and convenient. In places where banking services may be limited, or there is limited availability of debit/credit cards, you can hope to reach out to a wider audience. Cryptos are not controlled by countries and financial institutions making them more appealing as a stable option.
- Fees: If you consider the fees involved in credit/debit card transfers you will find these quite high. As a business owner, you will have to spend quite a lot of commission and transaction fees. Cryptos also entail fees but these are far lower.
- Faster transactions: Traditional means of money-transfer are slow while the blockchain facilitates faster transactions and streamlines your cash-flow. This helps to keep customers satisfied because payments are processed faster, leading to prompt deliveries. For brands that are looking to expand their client-base this can be ad added advantage. Cryptos make international transfers not only quicker but also cheaper.
- Security: Since cryptos are encrypted, they cannot be stolen or forged. This helps to eliminate the chances of fraud that is a common threat in credit card use.
- Clean data: The blockchain is transparent and ensures that consumer data is clean. This helps retailers improve their marketing efforts. They can customize and tweak marketing strategies to target their customers better and avoid revenue wastage.
- Better user experience: As an ecommerce store owner, you can guarantee a superior user experience to your buyers when you offer them another payment choice at the point-of-sale counter. The flexibility to choose from multiple payment options appeals to shoppers, increases conversion rates, and lowers cart abandonment.
- Loyalty programs: These are a great tool for acquiring new customers and retaining old ones. Based on the blockchain, the crypto offers a fabulous tool for offering store credit. You can use the ledger to keep records of customers organized and this ensures tokens are never stolen or misplaced.
With the recent pandemic, shoppers are spending more time and money buying things online than they ever used to. But this magnifies the threat of scams and frauds. This sets the stage for entry of cryptos which are now being seen as a safer and more stable payment option. According to a Pipslay research survey in February 2021, almost 57% of American consumers feel that big brands should accept cryptos.