The average crypto daily trading volume is $120 billion. Bitcoin dominates over 40% of the cryptocurrency market. 43% of Americans ages between 18 and 29 have traded or used a cryptocurrency.
The use of cryptocurrencies in eCommerce: What do you need to be aware of
Tech If trends shape 2021, cryptocurrency will surely be at the top of the list.
A once-in-a-lifetime investment developed by those with a high-tech background. The market in the world is expected to grow to $57 million by 2025, which is a signal that cryptocurrencies are set to become an essential player within the world of eCommerce.
As cryptocurrency grows more well-known to the public, merchants will face greater expectations about their usage and acceptance. Whiplash will help clarify this frequently confusing subject and explain why businesses must be aware of cryptocurrency.
The cryptocurrency is a form of money (i.e., the computer’s code) that is not issued by a government or bank that allows people to make purchases anonymously. The most well-known currency is Bitcoin, and these virtual coins can be purchased or sold and then stored in exchanges like Coindesk and Coindesk, and purchase online-based goods anywhere are accepted.
For purchases, Bitcoins must be stored in an electronic wallet or a hard drive with security software or via online marketplaces (e.g., Coinbase). You can make purchases via the transfer of Bitcoin in your online wallet to the sellers.
Digital currencies are a constantly evolving area, with new money being introduced every week and currencies that are becoming more valuable and losing value. According to the most recent crypto-economic news that the following coins are the top currencies that are based on the market capitalization of:
Bitcoin is the cryptocurrency that started everything. Before it came to the market, its creator Satoshi Nakamoto came up with the concept in a document called ” A Peer-to-Peer Electronic Cash System ” in 2008. Nakamoto wanted to develop a system that would centralize the financial industry and give control back to individuals through a digital transaction system.
Ethereum was a currency created in response to the creation of bitcoin. The coin’s creator, Vitalik Buterin, wanted to create a platform that would completely transform the web. He envisioned Ethereum as a system that could facilitate more than just transactions in the financial sector than Bitcoin permits. The Ethereum platform has become an open platform for developers to develop decentralized apps, such as codes or contracts, without the need for third-party platforms.
Though it began as a joke created by Software engineers Billy Markus and Jackson Palmer, The Dogecoin concept has evolved into an actual currency of its own. It is based partly on its predecessor, the Doge joke; the Dogecoin has grown from a satirical remark on cryptocurrency to an actual investment option that is more popular than the creators anticipated. Many still have reservations about it, but the support of such as Elon Musk has made it necessary for Dogecoin to be considered a serious investment.
XRP, also known as Ripple, is an unregulated digital asset located within the cryptographic decentralization XRP Ledger that a group controls made up of servers operating peer to peer. The XRP cryptocurrency was created to allow people to transfer money electronically and avoid the costly transaction fees and long conversion time that bitcoin does. It can be purchased and traded and is a currency that allows users to transfer money swiftly across the globe in a safe manner. XRP is often misunderstood as the currency’s creator, Ripple Labs, but it is essential to know it is independent.
Although Bitcoin Cash is remarkably like Bitcoin, however, distinct differences separate them. Bitcoin Cash permits more processing of transactions by expanding the size of blocks. Through increasing the number of transactions, Bitcoin Cash hopes to compete with major players in the market, such as Visa and PayPal.
Is cryptocurrency an option to consider in eCommerce store owners?
As we’ve already seen, many of the largest e-commerce platforms and retailers accept cryptocurrencies to purchase items. However, do they need to? Do you? Let’s look at both the advantages and disadvantages and discuss taxes.
Potential disadvantages of cryptocurrencies in retail online
Despite the rapid growth in the use of cryptocurrencies in the retail industry, not everyone believes they’re ready to be mainstream eCommerce. It’s worth researching before you dive into the realm of cryptocurrency.
We examine the reverse of the (bit)coin in the following:
The price volatility price of cryptocurrencies fluctuates wildly, which creates uncertainties for both businesses and consumers. It can be tricky when it comes to returns if you can prove that the cryptocurrency value has changed from the time of purchase!
A myriad of options, there are thousands of cryptocurrencies readily available and brand-new ones appearing every day; choosing which digital payment option that you can accept to your eCommerce website can turn out to be a minefield.
Trust issues: While adoption is increasing, however, the image for cryptocurrencies and the technology that underlies they have been damaged due to negative portrayals by the press. In the end, the trust level for these electronic payment methods remains in the minority of people.
Cashflow disruption: Receiving revenues in cryptocurrency and the outgoing payments (to staff and suppliers, for instance) are made in cash can be challenging.
How do you accept cryptocurrency payments via the eCommerce website?
If you’re thinking about getting crypto payments for your website, there are two options you can consider:
1 Pay with your wallet The option lets the user accept payments straight into your electronic wallet (which could be kept on a smartphone, computer, or hard disk).
2 Payments processed by processing companies that are the third party: in this scenario, the third-party service providers such as BitPay, Coinbase, or NOWPayments handle transactions on behalf of you. If you’re a Shopify business seeking to accept cryptocurrencies, then you should activate any or more of these alternative payment methods on the ‘Payment providers’ section of your Shopify administrator.
Once you’ve enabled it, you’ll be able to accept more than 300 digital currencies, including Bitcoin, Ethereum, and Litecoin. Learn more at the Shopify Help Centre. Of course, that’s not all. As we said earlier, merchants connected to PayPal can now accept cryptocurrencies purchased from US customers. We are assured that it won’t take long before you can buy cryptocurrency from customers in different parts of the world.
The Future of Cryptocurrency in Ecommerce
The term “cryptocurrency” has been a buzzword for quite a while. It’s not yet a mainstream term, but one of the beginnings of the cryptocurrency (Bitcoin) was created in 2009.
New(ish), although it’s not, cryptocurrency has had an enormous impact on the world of trading.
The technology that is behind cryptocurrency is known as the blockchain. It’s so obscure that only a few have taken the time to find out the details of it. Let’s leave what we know about the “how” and the technical aspects aside since e-commerce businesses only need to understand blockchain technology as a means of payment.
The coins offer e-commerce businesses a more than a familiar concept to hang to regarding payment in themselves. If cryptocurrency is already used to pay for goods, what will the future be for cryptocurrency in e-commerce? What are the things that brands must be aware of today? What can they do to get ready?
First, what is explicitly cryptocurrency?
Cryptocurrency is a digital currency whose main feature is its complete autonomy from banks. Any state or government does not issue it. Every different coin “type” is invented.
The name is derived from the fact that it utilizes encryption technology to manage its use and verification.
Transactions are vetted by an entirely decentralized system, which provides an anonymity guarantee for those who validate the coins and the holders of the coins.
In the same way, the ledger that is used to record every transaction of a coin is recorded is a fully public account. This is why coin owners are prevented from spending their coins repeatedly.
Are you still confused?
The critical takeaway is whether you’re in e-commerce oil, real estate, gas, public sector agencies, cryptocurrency is having an ever-growing impact on the market. This year, the trend was amplified through news articles like Elon Musk’s $1.5 billion investment in the Bitcoin Coinbase, a public launch
Coinbase. Bitcoin values began rising from $11,500 in October 2020 and hit more than $63,000 at the end of April in 2021. Bitcoin isn’t even the only cryptocurrency, which means that the impact on the various cryptocurrencies’ market is genuinely massive.
Identifying the best next steps for brands that sell online will require a careful examination of the risks and promises of cryptocurrency and the possible actions businesses could take to protect themselves.
Cryptocurrency Risks and Barriers in Ecommerce
The latest technology in e-commerce is always thrilling (like the incredibly cool application of AR); however, there are always challenges and risks to adopting. For cryptocurrency, there are risks probably higher than many of the other technologies that are gaining their way into the world of online shopping. This means that you must take these risks more seriously.
Little consumer buy-in
It’s still a “niche within a niche” for most consumers who have embraced it. This is partly due to its mystical aspect for those who aren’t aware of the technical nuances and the ins and outs. A further reason is the price. Buying a single Bitcoin is not necessary at more than 60 million dollars. However, it is making some people leave.
- Volatility In the context of Bitcoin rates, cryptocurrency is notoriously volatile. It’s a bit like gambling for some people that reduces adoption furthermore. The prices are for Bitcoin (in particular) are currently soaring and show evidence of rising shortly. Because it’s not supported with any fiat currency, it’s impossible to have a “knowing” where prices will be.
- Verification of transactions isn’t (as) instantaneous. This is an important element to consider for online stores. Instant satisfaction from buying online is delayed because cryptocurrency must be verified by the ledger public (where the history of transactions is recorded). The transaction is processed nearly instantly; however, the amount of time required will depend on the cryptocurrency wallet and the used website.
- There’s no consumer protection. Consumers understand that they’re not accountable for fraudulent credit card charges, and online retailers prudently incorporate a certain number of accounts back into expected revenues. None of the cryptocurrencies offers protection for consumers. However, this means that the consumer is entirely at risk for fraud (unless online retailers create their safeguards from the kindness they feel).
- Coin fragmentation will exceed 4000 cryptocurrencies at the beginning of 2021. It is up to the e-commerce company to make sense of the numerous choices to facilitate payments of the most popular cryptocurrencies for their clients.
- Energy and sustainability Maybe it will come as a shock. However, cryptocurrency is also renowned for the vast energy needed to make (or “mine”) coins by confirming them through the blockchain. Without going too far into the technical aspect, the energy usage is so significant that Bitcoin mining (not to mention other currencies) consumes more energy than the entire country of Argentina. Who would have known that cryptocurrency was so prominent in its carbon footprint?
Every company nowadays doesn’t want to be “part of the problem” in carbon emissions; therefore, the energy issue is one that brands should consider seriously.
Are there any chances that cryptocurrency and e-commerce form an explosive pair? Do those “cons” outweigh the “pros?” If there’s anything to be specific, the e-commerce companies that have seen the massive growth in the adoption of e-commerce by 2020 have discovered that any market change could boost the current trend surprisingly.
While cryptocurrency technology isn’t being investigated in a meaningful way by smaller and medium companies, the speed of change has already begun.
The following steps for e-commerce brands will be taken for online retailers, keeping each company’s particular position in mind with ear open. Even if your client base doesn’t include Bitcoin users, it is essential to stay up to date with developments in the marketplace so that you’re ready if accepting cryptocurrency becomes the norm.
Here’s what you can do for your brand to be doing today:
Pay attention to your clients.
Begin by taking a close review of your current customers. Examine your existing customers, as well as the groups you would like to draw more in (but don’t have “made it big” with yet). Are any of these segments embracing cryptocurrency? Do they even have it in their plans?
If you do, you’ll want to think about giving them the possibility of paying for your goods on the internet. If not, you might not be required to consider this option right now, but you’ll need to consider these next steps.
- Check out your competitors. No matter if you view your clients as “cryptocurrency type,” your competitors might think otherwise.
Check your competitors regularly to find out what payment types they offer.
Even if cryptocurrency payments are provided, they are seldom used on competitor websites; you do not want to appear like a dinosaur right next to the next one. If there are no competitors that provide cryptocurrency payments, however, contrary to what you might think, you’ll have plenty of time before you are forced to make the change.
- Be open to the future. Whatever you do, it’s essential to keep an eye on the ground. The pros and cons of cryptocurrency are challenging to evaluate on your own however there’s a growing pool of experts from the world of e-commerce and market researchers who are studying, reviewing, and writing about the constantly changing marketplace.
Join any crypto-focused news source that you enjoy and be ready to change your mind whenever new trends are brought out.
Your total adoption of the technology to create a marketing tool in e-commerce is contingent on the ability to adapt and cost-benefit analysis.
It was true when you thought about which channels to market your product on. It will be applicable when you incorporate AR and VR in your listing, and this will be the same for cryptocurrency and every other innovative technology that is thrown our way.
Benefits of Cryptocurrency in eCommerce
Let’s examine the advantages of accepting cryptocurrency on your eCommerce store:
Accepting cryptocurrency as an alternative payment option will allow you access to a new set of tech-savvy buyers who have formed an entire community within that cryptocurrency market. If you have the opportunity to pay using an online wallet or credit card, you can access a broader market and reach out to customers across the globe.
Contrary to credit card systems which require a couple of days to batch to process, cryptocurrency can be processed instantly, which means you have much faster access to cash. Rapid transactions can streamline your company’s cash flow.
Another benefit of accepting cryptocurrency as an alternative payment method is the low charges associated with each transaction. The costs can vary based on the way you choose to use them. Buy cryptocurrency in the account of your wallet or via an external third-party service like Coinbase; However, you’ll probably find them substantially less than the costs of other services such as PayPal and credit card processors.
Once a client has completed the transaction using cryptocurrency, it is impossible to reverse the transaction without the seller’s permission. This provides merchants more protection in the event of fraud on eCommerce since there isn’t a middle party that, for instance, banks, can take the money directly from the account without your permission.
How to Accept Payments in Cryptocurrency
There are two options to accept cryptocurrency for your online store. You can do this via one’s wallet or an external payment processor. We’ll cover both ways.
If you’re planning to accept cryptocurrency via your wallet, you’ll need to create a virtual wallet. Most wallets can be transferred to your phone or computer or purchased a hardware wallet. The hardware wallet is a safe that keeps the cryptocurrency within the device in a specific hard drive. It’s the only hardware device that allows you to keep a private key.
If you prefer, you can utilize an external payment processor, like Coinbase or BitPay. They’ll take care of the whole payment procedure, much like payment processors for credit cards payment processors can. The advantage of using an external payment processor over an individual wallet is that these processors can immediately convert cryptocurrency to fiat currency, thereby securing you from price fluctuations. Price volatility refers to changes in value that cryptocurrency is susceptible to, which can often be rapid and drastic. Being secure from this risk is that you’ll receive the amount you charged regardless of whether the value of your coin fluctuates during the transaction.
The choice of the right wallet and service provider is difficult. Keep in mind it is not always the case that all exchanges or exchanges are trustworthy as anyone can launch your cryptocurrency trading platform. If you’re interested in starting your own, you should consider hiring an expert in blockchain development.
If you’d like to accept cryptocurrency immediately and without inconvenience, there’s an even more efficient option.
The Fastened Way to Accept Cryptocurrency on Your Online Store
Instead of wasting time looking for the best wallet or attempting to create something by yourself, you could utilize an eCommerce integration and accept cryptocurrency for your store online immediately.
Shift4 Payments is a leading payment processor that allows you to accept credit cards and a variety of alternative payment methods. It also powers the eCommerce program Shift4Shop. If you’re using Shift4 Payments, you will be able to benefit from Shift4Shop’s end-to-end eCommerce plan at no cost. It offers all the features available on Shift4Shop’s paid plans and many bonus features. This plan is entirely funded by Shift4 Payments credit card processing fees that you’d have to pay for each sale. So, it’s an excellent deal.
The most intriguing aspect of Shift4 Payments, as well as Shift4Shop for a company that is looking to accept cryptocurrency, is that it accepts cryptocurrency is the partnership Shift4 has with BitPay. Online store owners using Shift4Shop or Shift4 Payments can access a fast BitPay integration to your eCommerce store.
We briefly talked about BitPay in the past; however, let’s get some more specifics about it:
What is BitPay?
BitPay is a cryptocurrency payment processing company. It offers options for using cryptocurrency for individuals, but what is most interesting to us is its features for businesses.
With BitPay, it is possible to provide customers with an easy checkout experience that takes a variety of cryptocurrencies such as Bitcoin, Bitcoin Cash, Ethereum, Dogecoin, and more. You can also accept cryptocurrency payments by a person if your company conducts sales in person.
BitPay is a one-time 1percent fee for transactions. It also includes the essential price volatility protection we mentioned earlier. Payments are made daily. You may opt to have your money transferred to a cryptocurrency wallet as well as exchanged into fiat currency and then deposited in your banking account.
It’s not just that BitPay is a fantastic cryptocurrency processing option for eCommerce because it’s integrated with Shift4 Payments. It’s also part of a total solution to sell online for no cost. You can create your online store using Shift4Shop and install Shift4 Payments to accept credit cards and unlock the unlimited, free Shift4Shop plan, and integrate BitPay to your website in just a few minutes. This means you’ll be capable of accepting regular as well as cryptocurrency payments as well as an ultra-modern and well-equipped online store with no monthly costs.
There’s no more affordable or efficient method to acquire an item like this for your company.
If you decide to take Bitcoin or other cryptocurrencies on your website, you must ensure that your system, transactions, and money are all as secure as possible.
To safeguard your bitcoin wallets and exchanges, make sure you use strong passwords and multi-factor authentication (MFA).
Back up, update, and protect your system, as well as your crypto wallet, regularly. If the money is critical to your business, consider freezing them or keeping the Bitcoin wallet offline, similar to flash drives. Also, don’t keep considerable sums of money in your wallet for extended periods.
While new technology might be perplexing and frightening, Bitcoin has the potential to transform the world of international trade and e-commerce as we know it. While you may not be comfortable with this, as the online and e-commerce industries evolve, you will get a deeper understanding of it.