Blockchain
What can buyers buy with cryptocurrencies?
How did it happen over and over In the payments landscape, end users ultimately want simplicity.
After all, no payments innovation can thrive if it isn’t easy and intuitive to use.
This has proven problematic for the adoption and utility of cryptocurrencies as a form of payment for everyday goods and services. Many blockchain and cryptocurrency adherents pride themselves on their technical and engineering know-how, embracing terms like “hashing,” “public/private keys,” “digital signatures,” and “zero-knowledge proofs,” which are complex and non-intuitive. for most users.
For consumers, the process of setting up wallets, securing private keys, and understanding blockchain technology can be daunting. For merchants, integrating cryptocurrency payment systems requires technical knowledge and resources, which can be a barrier to adoption.
But with the news last week (June 13) that helium updated the Solana Pay for plugin Shopify To broaden the scope of accepted cryptocurrencies and introduce new merchant-centric features, the advantages and opportunities presented by cryptocurrencies in the e-commerce sector are waiting to be exploited.
That’s because Shopify isn’t alone in supporting crypto payments. Other companies and platforms that accept cryptocurrency also include Newegg.com, PacSun, JomaShop, Microsoft AND Satellite TV.
However, cryptocurrency payments in eCommerce are just a trickle, not a flood yet. And for widespread adoption a number of challenges still need to be addressed.
to know more: Stripe Restores Cryptocurrency Payments, Citing ‘True Utility’
The rise of cryptocurrencies in eCommerce: a double-edged sword
One of the most attractive benefits of using cryptocurrencies in eCommerce is the possibility of significantly lower transaction fees.
Traditional payment methods, such as credit cards and online payment platforms, often impose fees ranging from 2% to 3% per transaction. For both small businesses and high-volume merchants, these fees can add up quickly, impacting profit margins. Cryptocurrencies, on the other hand, typically offer lower fees, especially for international transactions, making them an attractive alternative for cost-conscious merchants.
“It is important to know that cryptocurrencies are not just Bitcoin, Doge and NFTs,” Sheraz Sherepayment manager at Solana Foundation, he told PYMNTS. “… Blockchains are really alternative binaries for payments and financial activities… One problem has been the technology has not been easy to use, it was all designed by the engineers… to be very technology focused and not use case or UX focused.”
Additionally, when it comes to the benefits of cryptocurrencies, “lack of familiarity can lead to a lack of comfort, which will happen they often drive to the lack of adoption”, Ajay Rajanivice president of expansion and cryptography at Talahe told PYMNTS.
And in a digital age where instant gratification is increasingly the norm, the speed of cryptocurrency transactions offers a significant advantage.
To know more: Would you sell your house for Bitcoin? People do
Traditional banking transactions can take several days to complete, especially for cross-border payments. Cryptocurrencies can get around this delay, often processing transactions within minutes. This speed can be especially advantageous for time-sensitive purchases, such as event tickets or last-minute travel reservations.
With regard to cross-border payments, another advantage of cryptocurrencies is that cryptocurrencies are inherently global, not bound by national borders or subject to exchange rate fluctuations. This universality is a boon for e-commerce platforms that operate internationally, as it allows them to accept payments from customers anywhere in the world without the need for currency conversion. For consumers, this means greater access to international markets and products, fostering a more interconnected global economy.
For merchants, one of the most attractive aspects of cryptocurrency transactions is the elimination of chargebacks. Traditional payment methods allow customers to dispute charges and potentially cancel transactions, which can be expensive and time-consuming for businesses. Cryptocurrency transactions, once confirmed, are final, providing merchants with greater certainty and reducing the risk of revenue loss due to chargebacks.
to know more: Blockchain use cases gain momentum as the user experience becomes simpler
The challenges cryptocurrency payments still need to overcome
Despite the growing interest, cryptocurrencies are not universally accepted. Many e-commerce platforms and brick-and-mortar stores still do not accept digital currencies, limiting their usefulness to consumers. For merchants, the limited acceptance of cryptocurrencies by suppliers and service providers can make it difficult to use digital currencies for operational expenses and supply chain needs.
Cryptocurrency volatility remains a significant obstacle. The value of digital currencies can fluctuate greatly over short periods, creating uncertainty for both buyers and sellers. For consumers, this volatility can impact the purchasing power of their cryptocurrency holdings. For merchants, this can impact revenue and profit margins, making it difficult to price goods and services accurately, as well as decide which crypto tokens to accept.
Separately, scalability remains a significant challenge for many cryptocurrency networks. During periods of high network congestion, transaction times may increase and fees may increase, making the use of cryptocurrencies for payments less efficient.
Furthermore, the relatively low level of understanding and adoption of cryptocurrencies among the general public remains an obstacle. Many consumers are reluctant to use a payment method they are unfamiliar with, and educating them on the benefits and use of cryptocurrencies can pose a significant challenge for merchants.
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