With the payment giant Paypal announcing its latest plan to allow users to buy and spend crypto, should you start accepting cryptocurrency in your online store?
Who currently accepts cryptocurrencies?
Many large transnational corporations from a wide range of industries have begun accepting cryptocurrencies as a mode of payment. Notable companies include software giant Microsoft, game streaming platform Twitch, and retailer Whole Foods.
Digital currencies have improved service efficiency by reducing transaction time and cost, as well as served as a mechanism for spreading financial services to under-banked regions of the world. Has Bitcoin and cryptocurrencies become the future of payments?
Advantages of accepting cryptocurrency as a payment method
According to an HSB (a Munich Re company) survey, more than one-third of U.S. small and medium-sized businesses accept crypto as payment for goods and services, with younger companies up to twice as likely to trade in crypto. Compared to the legacy payment systems, cryptocurrency as a means of payment has a number of advantages.
1. Improved Cost Efficiencies
Traditional payment processors charge a wide variety of fees. The average credit card processing fees range from 1.7% to 3.5% per transaction. In 2017 alone, merchants paid $90 billion to Visa and Mastercard in credit card swipe fees.
With cryptocurrency payment processors, merchants can expect significant cost efficiencies compared to traditional payment processors. By accepting cryptocurrencies, merchants are not susceptible to foreign exchange fees as cryptocurrencies are borderless. Settlement and processing fees for cryptocurrencies can be as low as 0.5% and there is usually no upfront setup cost.
Certain cryptocurrency payment processors not only allow merchants to start accepting cryptocurrencies as a payment method, but they also offer merchants the flexibility of being paid in fiat.
2. Faster Settlement Times
Traditional payment processing can be time-consuming. These payment processors can take a few working days to weeks to process transactions.
However, it is not the case for cryptocurrency payment processors. An advantage of accepting cryptocurrencies is that transactions can be processed instantaneously. Even if merchants choose to be paid in fiat, they can expect the funds to be in their bank account within two days. This is significantly faster than traditional payment processors.
3. Access to wider Customer Base
An underestimated property of cryptocurrencies is the fact that cryptocurrencies are borderless and merchants can access a global pool of customers. The University of Cambridge estimates that there are over 100 million unique crypto-asset users in Q3 of 2020. According to a recent survey conducted by leading research and advisory firm Forrester Consulting, accepting cryptocurrencies generates new sales by attracting first-time buyers who prefer paying with bitcoin or other cryptocurrencies. The survey also suggests that merchants who accept cryptocurrencies can expect larger transactions as buyers who pay with cryptocurrencies tend to spend more than other customers.
4. Improved Security
One of the challenges merchants might face is fraudulent transactions. Cybercriminals may steal card information and conduct fraudulent transactions on your e-commerce website. According to the US Federal Trade Commission, the number of identity theft reports doubled from 330k in 2014 to 650k in 2019, accounting for over 20% of overall fraud cases in the country.
With crypto transactions, there is improved security as identity theft and fraudulent transactions are not as common due to the nature of blockchain technology.
5. Improved Privacy
With traditional payment processors, merchants may have to provide information such as credit score and other financials.
Cryptocurrencies payment processors, on the contrary, only require basic information when you set up an account, such as your name and email address. Cryptocurrencies payment processors usually do not consider the size of your business or your credit score.
The Future of Payments
Undoubtedly, cryptocurrencies are expected to become increasingly popular as a form of payment. With more and more multinational companies and educational institutions embracing cryptocurrency payments, cryptocurrencies are poised to be the future of payments.
As a means of payment, cryptocurrencies offer fast settlement times and cost savings. It solves problems brought by banks, credit cards, and traditional payment processors.
On the merchant's end, cryptocurrencies are just as easy to deal with, and require a decent payment system and Bitcoin accounting software.
How to start using cryptocurrencies on your nopCommerce site
You can start accepting crypto payments in your store on nopCommerce right now. It is possible for our customers thanks to Crypto.com payment module. This plugin allows you to do the following:
- Accept cryptocurrency payments from 30M+ users globally
- Competitive rates: No transaction or setup fees, 0.5% settlement fees
- Easy Integration: No technical knowledge required
This plugin is free. To start using cryptocurrency payments follow this instruction:
- Create account here
- Download the Crypto.com Pay plugin archive, it’s supported by version 4.30
- Configure Payment method with local plugin and upload the plugin archive
- Find new plugin in the list of your plugins and push the button “Install”
- Now configure your payment settings with this instruction in our technical documentation.
And with that your eCommerce store will accept secure payments with cryptocurrencies.
This article was prepared by Crypto.com, а nopCommerce Technology Partner. Crypto.com was founded in 2016 on a simple belief: it's a basic human right for everyone to control their money, data and identity. Crypto.com serves over 5 million customers today, providing them with a powerful alternative to traditional financial services through the Crypto.com App, Card, Exchange and DeFi Wallet. Merchants can now offer their customers the option to pay with crypto using Crypto.com Pay Checkout. Click here to learn more about Crypto.com Pay.