Cryptocurrency, blockchain, Web3, and the Metaverse have become popular investment destinations for not only tech-savvy young investors but also institutions and regular businesses. But after being in the market for multiple years, people have begun questioning the utility of these technologies and where/how/for what purposes they will be used in day-to-day activities.
To answer this question, many large consulting firms and banks such as Boston Consulting Group, PwC, Deloitte, and Goldman Sachs have begun testing the waters on crypto use in the real economy as well as for investing.
In particular, a research survey conducted by Deloitte in December 2021 states that around 75% of retailers are planning to adopt digital currency payments in the coming 24 months. Retail businesses have the ability to unlock a huge market use case for cryptocurrencies and blockchain.
So this statistic from Deloitte raises an interesting question of why this trend is happening and whether it’s truly going to help revolutionize the retail sector by overcoming the restrictions around service charges and payments.
Revolutionizing Payments With Crypto
Imagine a world where healthcare, university tuition fees, hotels, casinos, and many more business areas accept cryptocurrency as a legitimate source for payments. That would be particularly convenient for international customers. This scenario isn’t that far away in fact. Growing demand for stablecoins, retailer interest in cryptos, and a tech-savvy generation Z indicate that it’s very likely to happen sooner or later.
The Deloitte survey sample size was around 2,000 senior executives from across the United States, and largely represented in the consumer goods and service industries. One result is that 87% of merchants recognize that accepting digital currencies gives them a sharp edge over their competitors.
In addition, 93% of merchants that have accepted cryptocurrencies as payments are not only experiencing a hike in their customer base but also an increase in their brand perception. This means that customers enjoy using cryptos at the checkout and feel more attracted to retail stores/businesses that accept this payment method.
Therefore, it seems that implementing cryptocurrencies and blockchain technology for an organization’s internal infrastructure is having a positive impact on the company’s overall growth. For example, 71% of organizations that started implementing digital currencies had a very compelling impact, 22% reported a little improvement and only 7% did not experience any effect at that time.
However, because blockchain, cryptocurrencies, and stablecoins are new and unconventional technologies, 89% of respondents find it challenging to integrate them into their business. So despite the organization or company’s revenue size, companies fear that because of the technology’s complexity, it’s going to be difficult to integrate with existing systems. In this regard, it’s mainly middle and small-size organizations that have reported some other challenges like scarcity of leadership (31%), an unclear ROI (31%), and insufficient funds to adopt the technology (30%).
However, despite the challenges, there are so many advantages that these technologies provide that will make it very difficult for retailers to deny digital currency payments at their stores in the coming months and years.
Analyzing What Advantages Cryptocurrency Payments Provide For Businesses
1 Customer Comfort
First, is customer support. Adding cryptocurrencies to a company’s payment system not only eases the payment process for local customers, but more importantly, it’s also super convenient and economical for international customers.
International customers in any location find it difficult to use the local currency because it’s always an additional step, especially dealing with conversion fees and knowing the exchange rates.
Therefore, retailers that can overcome this challenge will surely be able to capitalize on the extra thousands of dollars that foreigners will be willing to spend (as long as the process is easy for them, say through using stablecoins for example). This will also provide trust for customers because of crypto/blockchain’s security layers.
2 Trust & Transparency
Second, is trust. For example, as merchants start adopting digital currencies for payments, it starts becoming more transparent and more of a regular occurrence. When something becomes a habit, especially when a new technology comes on to the scene and everyone starts using it, that results in more trust for customers. This is one of the major reasons for the tremendous increase in the customer base for early-adopting crypto payment merchants.
3 Lower Merchant Charges
Third, is lower charges. The average merchant transaction charge is between 1.5% and 3%, an expense that if it could be avoided would save millions of dollars for Main Street businesses every year. This is because the fees for crypto transactions are only blockchain fees, and blockchain fees are significantly lower than bank and Visa fees. On top of that, cryptocurrencies are uniform all around the globe. This means that multinational organizations that use cryptocurrencies for trade and payments will have an added ease of doing business in any part of the world.
4 Robust Merchant Security
Fourth, is security. Because of the decentralized nature of digital payments, not only does it protect customers from hidden or additional charges by service providers, but it also protects merchants from scams and cyber attacks. A note that this is in reference to purely blockchain transactions. However, when using untrusted and unverified centralized intermediaries, the same risks apply. Doing transactions on the blockchain directly to other blockchain wallets, however, are perfectly safe. As long as each side of the address applies proper safety protocols and risk management.
5 Fast & Customizable
Fifth, is speed. Blockchain technology is known for its speed, especially for transacting in BTC, ETH, USDT, and other coins. Moreover, because of its decentralized nature, it almost never goes out of service. For example, the Bitcoin blockchain and Ethereum blockchains do not take off on weekends. This allows people to still use the network and conduct business on weekends. No more waiting for Monday morning when the banks finally open. Secondly, cryptocurrency payments are customizable – so if a retail merchant wants to expand into e-commerce, it will be easy to do because cryptos and online payments are super compatible.
As surveys continue to show blockchain and crypto adoption happening in different ways such as new wallets, investing, payments, institutions, and retail – this means a new wave is starting to build. Right now the foundations are still being laid, but in the coming years, as cash continues to slow down, as businesses look for alternative investments to make, retail companies are going to move into the crypto space. It’s not a matter of if, but when. However, for that to happen, complexity, development, and security concerns need to be solved