From the very beginning, cryptos and blockchain technologies were predicted to be major disruptors for many business processes, not just the transaction part but they are bringing change to the entire ecosystem for nearly all the running and upcoming businesses, one such deeply affected category of business is the E-commerce market.
Blockchain technology got everything needed to revolutionize the E-commerce market and many major market leaders are in the process of adopting this game changing technology. Overstock, NewEgg and TigerDirect all had already jumped on the bandwagon of crypto (Just to name a few).
In this blog, we will discuss how this “dynamic duo of the internet”, cryptocurrency and E-commerce together can shape the way we make online purchases.
What benefits does crypto E-commerce bring to the business owners
E-commerce brands can get numerous advantages by integrating cryptos in their businesses. Let us understand the advantages of crypto e-commerce in 4 simple points –
- Easier and cost effective transactions – We as consumers may not realize it, but many online transactions like the ones from credit cards take up to 14 days to reach the seller. On top of it, the seller also needs to pay hefty transaction fees on the payment. With cryptos in place, the transaction got done in minutes, also with very low transaction fees (around 1%). Some new cryptos are even trying to bring down these transaction fees even lower, while making the transaction near instant rather than minutes. Observing the potential of blockchain technology, Payment gateways like Pay-Pal and Visa had also announced to accept payments in USD pegged cryptos like USDC and USDT in the near future.
- Making Market expansion easier – No borders or regulations are able to bound the crypto industry. For businesses, it means they can provide their international consumers with a fast, reliable and easy way to make payments while taking no headache of taxes and regulations. Cryptocurrency tends to curb all the expensive foreign transaction fees and complex regulations, which earlier were stopping business from expanding into international markets.
- Community – There exists a wild Community of cryptocurrency enthusiasts (like myself), which you might be aware of. Early adoption of cryptocurrency will get the crypto adopting brand in front of them and hence giving the brand a competitive edge than the traditional businesses in acquiring this consumer base.
- Security factor – In the crypto world, Power lies in the hands of a normal consumer. Each and every transaction ever carried out in blockchain can be checked by anyone in the world, having access to the internet, all while respecting the individuals right to privacy. Which reduces the chances of fraud and makes it easier to resolve any disputes regarding payments. And also by reducing the risk of security breaches, a brand can gain more public trust by accepting payments in crypto.
Disadvantages or risk involved in accepting Crypto payments
Like every new technology, there are some disadvantages or risks involved in accepting crypto payments, which needs to be addressed first. These are as follows –
- Price volatility – Price volatility is one of the biggest reasons why businesses avoid crypto payments, as a business owner myself, I understand the risk involved and many famous individuals had pointed out this issue. But there exists a viable solution to this concern, which is USD pegged cryptos like USDC and USDT. USD pegged cryptos are cryptos pegged with the price of a Us dollar, hence have a relatively lower levels of price fluctuations hence well-addressing the concerns of price volatility. Or one can rely on cryptocurrency processors, like BitPay, who provide the business with an option to convert the credited crypto into Fiat money, Immediately after the transaction.
- Skepticism and regulation concerns – It feels bad to see people still can’t see the underlying value of cryptocurrency and blockchain, even when this is going to be the future. But the public opinion regarding cryptos will change as time goes by. Other concerns people might say Governments around the world will ban cryptocurrency, blah-blah and what not. To that regard I want you to check the crypto holding patterns around the world, many sovereign Governments are actually buying cryptocurrency and some Central banks have announced plans to launch their own variant of cryptocurrency. So, that’s really not the concern unless and until you live in China.
- Environmental concerns – I assume most of you must have heard about the environmental concerns with the the use of cryptocurrency. It is a genuine concern and we need to talk about it. Mining cryptocurrency requires many powerful computers consuming an enormous amount of electricity. But remember Cryptocurrency is a technology and it is able to change itself. Cryptos like Ethereum are already trying to shift itself to a more sustainable way of crytpo mining, called proof of stake. So, this concern will also be resolved as time goes by.
Whether you believe or not, but one thing is undeniable that cryptos and the blockchain technology gonna make a tremendous impact on the E-commerce industry. It will be fascinating to see how the introduction of Cryptos, more specifically the Blockchain technology will shape the E-commerce industry. One should keep a close eye on this dynamic duo of Cryptocurrency and E-commerce.