The definition of a great payment method lies in its simplicity and user friendliness. If the transaction is complex and has tons of barriers, it will be hard for both users and sellers for a successful transaction. Paying with crypto resolves nearly all barriers as a global payment method. However, there are some educational barriers.
Terms such as wallets, private keys or digital signatures sound a bit confusing, and this alone is a reason not to implement them in everyday transactions. Setting up a wallet and understanding how blockchain technology operates can be overwhelming initially, especially for your average eCommerce buyer.
Not only do buyers face crypto implementation challenges, but merchants also face obstacles, such as the need for technical know-how and the mandatory assets for setting up crypto payment methods. However, a recent update from Helio's Solana Pay plugin for Shopify suggests that cryptocurrency payment potential still resides in eCommerce. This is just a small step toward fully accepting crypto in eCommerce.
Furthermore, the list of online platforms that accept crypto payments is long and constantly growing. It includes names such as Shopify, AT&T, Planet Express, Sling TV, Microsoft, Dish TV, and many others. However, the acceptance of big players is not enough to make cryptocurrencies the number one payment method.
As we said, crypto as a technology and payment method is revolutionary. With so many people including cryptocurrencies in every aspect of their shopping lives, more small and medium businesses are obligated to consider them a serious payment method.
E-commerce is where paying really stands out since its main advantage is its cost-effective policy. As they come with lower fees, the transactional cost usually varies between 0 and 1%. Traditional payment systems, like credit cards and online payment platforms, often come with fees of 2% to 3% per transaction, which can provoke great financial losses for small businesses or high-volume sellers.
From a buyer's perspective, cryptocurrencies provide great benefits. They are a safe way of online shopping, as you are not obligated to give personal financial data, such as credit or debit card information, to the provider of goods or services.
For users who are new to the crypto payment method, they need to establish a couple of things in the beginning. The first thing is to create a crypto wallet—either provided by exchanges or specialized for it—MetaMask, for example. Once that is done, users need to purchase crypto from the best crypto and Bitcoin exchanges. They either need to deposit fiat currencies or buy them directly with a credit card or Paypal.
Once that is done, the shopping can begin! For instance, if they purchase a T-shirt on an eCommerce site that is specialized for that, the crypto transaction takes a couple of minutes to complete, which is really fast compared to traditional payment methods (international payments may be conducted in a couple of days to weeks).
Moreover, crypto’s global nature is underlined in cross-border payments, as they are not tied to each country's governance by central authorities, nor are they affected by fluctuations in exchange rates. This is a huge advantage for the online platforms that provide products or services globally, as it removes the need to involve third parties when making a payment, which always has many costs, such as fees or currency conversions. Most importantly for merchants, chargebacks can not happen when making crypto payments.
Once the transaction is confirmed, there is no coming back, which is a huge plus for cryptocurrencies compared to traditional banking systems, where each transaction can be disputed and even reversed.
Despite the many benefits we listed above, crypto as a form of payment method faces many challenges that may or may not slow down their integration in everyday eCommerce transactions. From a buyer’s point of view, one of the biggest hurdles is the limited acceptance of digital currencies.
Many online eCommerce platforms do not fully trust the cryptocurrency payment processes and do not include them as an option of payment, which puts a limit on the buyer’s choice of payment method. From a seller’s point of view, setting up a crypto payment system often comes with a lot of expenses, and many smaller businesses simply cannot afford it.
Additionally, not every supplier or service provider accepts cryptocurrencies, which yet again limits crypto’s use for covering business expenses. The crypto market is extremely dynamic, and prices fluctuate daily, creating a sense of unreliability in cryptocurrencies as a payment method.
Volatility is a main concern for both parties. Buyers usually fear a decline in their asset’s purchasing power, and sellers face worries over putting a price on goods and services.
Even though blockchain technology is a leading force in the digital revolution, during periods of high traffic, crypto networks experience overload, accompanied by lower transactions and higher fees.
All of these obstacles create a certain doubt in cryptocurrency’s efficiency as a payment method. However, let’s not jump to conclusions. Keep in mind that crypto and blockchain technology is a work in progress and has been upgrading ever since its introduction.
Cryptocurrencies offer many benefits, but they are far from perfect. The key to making the most of them is to be prepared to face the main issues, such as broader acceptance, price fluctuations, and sometimes scalability difficulties. However, they are a cost-effective way of making a payment, and once you get familiar with how they work, cryptocurrencies will definitely become part of your payment methods.
Purchasing goods and services has never been safer, as you do not have to expose personal financial information to online providers, and you can make a purchase within minutes from your phone or laptop. After considering the pros and cons, the conclusion is loud and clear: cryptocurrencies are the future of eCommerce shopping.