When it comes to technologies that could transform the world – or that are already in the process of doing so – it is fair to say that cryptocurrencies have been among the most excitedly talked about ones in recent years.
And it is clear that leading digital currencies such as Bitcoin, Ethereum, and Dogecoin have moved ever-more into the mainstream conversation about the financial world. Another key part of this discussion has been concerned with central bank digital currencies (CBDCs), such as the mooted (but not yet existent) “Britcoin”.
If you listen to many well-placed observers across the media – including social media – you will hear talk about crypto being “the future”. It is a line of thought that even a fair few more traditionally minded financial experts are coming to agree with.
Ever since the introduction of Bitcoin in the late 2000s, crypto has been the subject of intense debate. Some people have declared crypto to be a dangerous but temporary fad, while other experts have hailed it as something that has already radically reshaped what global finance can and should look like.
The last decade or so has shown us that there were valid points on both sides. Many individuals and organisations have been stung by the boom of crypto. However, growing numbers of businesses are also harnessing the benefits of digital currencies, and those advantages have proved to be wider-ranging than some bystanders might have once predicted.
The rise of the concept of the ecommerce crypto payment gateway is one of the latest “hot topics” in crypto. But is crypto really the future of ecommerce payments? Below, we take a closer look at the facts and the reality behind this claim.
A short introduction to crypto
Before we dive into the relationship between ecommerce and crypto, it is worth taking a moment to sum up what we mean. Put simply, crypto, or cryptocurrency, is a form of digital currency that exists through a computer network that operates independently from any financial institution or authority.
Such digital currencies use cryptography to ensure encryption and security, and have seen a huge rise in popularity over the last decade – including in the field of ecommerce.
What is ecommerce, and what is crypto’s role in it?
As the name suggests, ecommerce is a form of commercial transaction that is conducted entirely online in the digital space – there is no in-person interaction at all.
Ecommerce is a popular choice for businesses that want to share and sell goods and services, but that are unwilling or unable to meet the high overhead costs associated with the operation of a physical, brick-and-mortar business.
Ecommerce stores operate through three main sections: a channel through which buyer and seller communicate, a portal through which goods and services are advertised, and a payment gateway, which actually carries out the exchange of money and completes the sale.
As you can imagine, security is a major concern for those who use ecommerce stores, as well as those who run them. But could crypto be an effective way to bolster security for such online outlets?
What benefits arise from using crypto for ecommerce payments?
As you can imagine, there are a number of benefits that can come with deciding to accept cryptocurrency payments gateway options for your ecommerce business. Below are a few examples of those:
Unlike traditional payment options, cryptocurrency does not need any third party or intermediary to be involved in the process. Traditional payment methods require the participation of a third party such as a bank, and this can slow down the process.
Crypto, on the other hand, can be processed quickly and efficiently, keeping the customer satisfied, and ultimately increasing the number of sales that can be made in the given online store.
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Quick and easy cross-border transactions
Cryptocurrencies can also make it easier to complete cross-border transactions more rapidly and with lower fees. This can have a significant impact on an online business, allowing it to trade on a global scale, which could help the business grow its customer base.
The lack of third-party involvement allows crypto to be processed without incurring hefty fees and charges, which can help cut a given online store’s costs significantly.
This gives ecommerce store owners the ability to price their items at a more competitive rate, thereby increasing their chances of attracting willing buyers.
What are the risks that come with using crypto for ecommerce payments?
As with any payment option or financial system, there are – of course – risks that need to be taken into account when using crypto for ecommerce. Below, we have cited a few of them:
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The unpredictability of crypto
Perhaps the biggest risk that comes with crypto is that it can be volatile and unpredictable – and this can have a negative impact on the finances of a business. If you accept crypto as payment only for the value to drop before conversion, you may be out of pocket.
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A lack of meaningful and consistent regulation
Another key risk that can arise with crypto for ecommerce stores, is that it is not subject to the same regulations and laws as traditional banking. This can cause you considerable stress if you are operating across multiple jurisdictions, give that widely varying laws around crypto can be in place from one country or state to the next.
It is worth emphasising that at the time of this article being written, the regulatory picture around crypto was changing fast in many parts of the world. The European Union (EU), for instance, recently brought in its much-talked-about Markets in Crypto Assets Regulation (MiCA), which is aimed at helping to bring greater certainty to a sector that hasn’t been associated with much certainty so far.
That particular law is set to take effect in 2024. In the meantime, much of the above advice about regulatory inconsistency and uncertainty around the world, still applies.
Don’t underestimate the role that crypto payment gateways will play in the future of online stores
There is no denying that adding crypto to your payment gateway can be a real benefit for your e-tail store. However, it is important to do your research, and to get to know both the pros and cons, before you proceed with implementing such a solution for your own ecommerce outlet.
Disclaimer: This article contains sponsored marketing content. It is intended for promotional purposes and should not be considered as an endorsement or recommendation by our website. Readers are encouraged to conduct their own research and exercise their own judgment before making any decisions based on the information provided in this article.
