Over the past few years, cryptocurrencies have moved beyond purely technological subjects into some of the most discussed topics in the sphere of global and national financial development. The rapid growth of cryptocurrency capitalization and the development of the collective investment model (crowdfunding) were the reasons for a sharp shift in perspectives.
In contrast to many areas where blockchain is currently only a potential application, distributed registry technology has a real practical use in financial transactions. Blockchain is often viewed as primarily related to cryptocurrencies, and when talking about cryptocurrencies, it is generally referred to as Bitcoin.
Today's most popular and promising practical application of blockchain technology is the payment field. We are talking about the so-called crypto-processing technology, which allows the transfer of funds without the intermediation of credit and other financial institutions, protects information about payments, accelerates currency conversion, etc. Due to all these advantages, more and more companies are using crypto-processing to process crypto payments even during market dips.
This article will explain why crypto payments are a reliable means of payment even during the bear crypto market. We will also look at the advantages that crypto payments have over traditional payment methods and analyze the future prospects that this technology already offers. At the end, you'll learn why businesses should start thinking about crypto payments now to stay ahead of the curve.
Despite the Сrypto Winter, Payments Made With Cryptocurrencies Are Still On The Rise
In order to understand how crypto payments during bearish market periods can support essential business processes in terms of mutual settlements, it is necessary to remember the important role that this innovative and up-and-coming technology plays today.
Any viable currency, whether a distributed cryptocurrency created by a computer program or a traditional paper currency issued by the government, must gain the trust of the community in which it circulates. Cryptocurrency processing offers a payment system in which the recipient no longer has to trust a "third party" (institutions such as banks or governments) to verify the solvency of the sender within an agreed-upon amount. Cryptocurrency systems put a solution to the trust problem on an indestructible, dispersed computer program that makes settling payments between different companies easier and faster. This fact undeniably confirms the increasing popularity of using crypto payments in business today.
Cryptocurrencies, claiming to perform the function of a means of payment a priori (by the construction of the protocol within which they exist), perform the function of a payment system as well. With standard fiat currencies, the situation is different: we can say that the dollar, which is a means of payment, can be accepted as payment for goods or services in cash (then the payment system as such does not exist) or in non-cash, through the payment system Visa, Mastercard and others. Since cryptocurrencies can only be paid for in non-cash form (due to the lack of physical representation), a distributed registry acts as a payment system within which settlements are made.
First of all, due to such important advantages as speed, reliability, and ease of use, cryptocurrency payments now occupy a place of honor in the economic system, particularly in the structure of payment systems. Moreover, the value of this cryptocurrency processing technology significantly increases when it comes to market crashes, usually accompanied by a sharp decline in the price of an asset. In this case, stablecoins, which are pegged to fiat currencies such as the US dollar, are a great tool to hedge the risks associated with high cryptocurrency volatility and can be used to accept crypto payments for goods and services.
Cryptocurrencies Offer a Number of Benefits That Traditional Payment Methods Do Not
To answer the question of how crypto payments during crypto winter can support important business processes, you need to understand what gives them value compared to traditional payment methods.
Cryptocurrency payment gateways are growing in popularity due to the widespread use of digital assets and the security benefits they provide. Many companies are starting to accept crypto payments to get ahead of the times and enter new markets. There are many
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Speed
In the blockchain, the operation time is usually a few minutes. After receiving the funds, you can either immediately use them or, if you work through any payment systems, the transaction can be made on the same day. In some cases, this period may be several days.
When using card processing, the receipt of funds is also carried out promptly. But in this case, first, you receive money from a merchant account in the payment system, and you can transfer it to yourself within the period specified in the agreement with the payment system. The period can be from several days to 1 month. In other words, you will be able to receive money at your direct disposal after this period.
- Security
Compared to fiat money, transactions using cryptocurrency are much faster and safer. Cryptocurrencies use encryption to verify transactions. A special code key is used to transmit and process the data.
Cryptocurrency information is stored in a blockchain, a digital ledger, or a public registry for recording transactions. The history of all transactions is recorded in a blockchain. It is impossible to rewrite the history of the blockchain, which guarantees security.
- Low Commissions
Cryptocurrency transactions are much more affordable than traditional means of payment. By accepting cryptocurrencies such as BTC, ETH, Doge, etc., as a means of payment, the online store does not have to pay high commissions like with traditional payment methods. This feature of cryptocurrencies helps business owners accept crypto payments and enhances their profitability.
- No Chargebacks
Chargebacks are a very unpleasant circumstance for businesses, and the higher the turnover, the greater the risks. Freezing disputed funds in accounts interferes with normal operations, and to some companies, it can lead to a complete blocking of accounts.
When paying with cryptocurrencies, users cannot dispute the transaction and get their money back as the payment system decides. Blockchain-recorded transactions cannot be edited or reversed. And for businesses, this is a clear and valuable advantage.
- Global Presence
Thanks to decentralization, cryptocurrencies are genuinely international. Accepting crypto payments opens up virtually the entire world to businesses, and it's impacting company performance: according to statistics, businesses that offer cryptocurrencies as a payment option make 40% more sales to new customers, double the average check, and get impressive ROI and increased net profit compared to those who only accept fiat currencies.
A growing, active international community of cryptocurrency enthusiasts is a great target audience for businesses regardless of category. The crypto community, for the most part, is a gathering of people interested in emerging trends. Ordering a trivial pizza for crypto is no less interesting for them than paying for technological innovation from a promising startup or a subscription to a favorite online entertainment service.
The Future of Cryptocurrency Payments is Looking Bright
The crypto future in 2023 looks promising. According to some
Payment applications will also play an important role. Last year, digital and mobile wallets accounted for about 45% of global e-commerce payment transactions. Today, some payment applications already offer users the opportunity to buy and sell cryptocurrency, eliminating the need to do it using cryptocurrency exchanges or special services.
Some companies have already started implementing elements of distributed blockchain networks to update their services, hoping to attract new customers and promote the use of cryptocurrencies. Those applications should make cryptocurrency transactions clear and understandable for everyone, thus helping to introduce cryptocurrencies into the mainstream market. However, it will likely take quite some time for both individuals and companies to adopt cryptocurrency as the primary means of everyday payment transactions.
To turn cryptocurrency into a mainstream payment method, companies, and their customers must be able to use it in their day-to-day operations. To begin with, the process of transitioning from traditional money to cryptocurrency will need to be established. For a while, retailers and business owners will want to avoid incurring transfer costs or taking on the risk of currency fluctuations. Thus, payment companies and crypto processing services will play a crucial role in facilitating this transition*.*
The popularity of crypto as a payment method will also grow as traditional money becomes increasingly scarce. Since fiat currencies are influenced by many external factors, provoking sharp changes in exchange rates, cryptocurrencies are much more stable. Even though their price also fluctuates, you can always rely on several stablecoins. The value of cryptocurrencies is primarily determined by demand, and it will inevitably grow. Given the development of blockchain and blockchain-based technologies, major cryptocurrencies are a reliable alternative to fiat volatility.
Businesses Should Start Accepting Cryptocurrency Payments Now to Stay Ahead of The Curve
To date, quite a lot has been said about cryptocurrencies, but interest in them has not disappeared yet. Moreover, the number of cryptocurrencies is increasing, and with them, more and more companies are switching to digital payments, even at a time when the markets are bearish. There are plenty of
- Marketing and Fundraising
As cryptocurrencies grow in popularity, people are looking for more and more
This is a positive aspect in terms of effective marketing. The number of people looking for goods and services with cryptocurrency payment is growing daily, and businesses have an excellent opportunity to tap into this growing market. Also, companies that accept crypto have an advantage over competitors by becoming pioneers in the field. Companies can easily create a marketing program to embrace crypto, showing how the technology is bringing their business into the future.
- Sales Growth
A company's ability to generate sales plays a crucial role in its success, and increasing the flow of customers ensures the growth of company profits.
Decentralized cryptocurrency makes it easy to scale the business. And if a business sells products or services, crypto allows it to accept payments from abroad, expanding the potential audience freely.
No payment disputes or refunds — the customer cannot dispute crypto transactions. In addition, blockchain technology verifies that funds are available before the transaction is completed. This makes purchasing virtually impossible without sufficient funds in the customer's account. Moreover, unlike a credit card payment, it cannot be reversed. The business receives all funds immediately.
- High-speed Transactions and Worldwide Access
When it comes to crypto payments, businesses don't need intermediaries to make transactions, so the money will arrive in the account much faster without waiting 2-3 banking days for transaction confirmation. It is also possible to withdraw funds daily in a different currency if desired.
The Internet allows companies to do business with any client from anywhere in the world. Even the smallest online store can now sell its goods and services in many different countries. And because cryptocurrency is decentralized, businesses avoid the costs associated with transaction fees and exchange rates. Thus, businesses now have a unique form of currency that applies uniformly regardless of location.
Conclusion
Using cryptocurrencies is becoming increasingly popular, and for a good reason — the more payment options a business provides to its customers, the more profitable it is. Even in times of market crashes, cryptocurrency payments remain a reliable alternative.
Cryptocurrencies are indispensable for diversifying a company's financial instruments and improving customer focus. The introduction of payments via digital coins will benefit any business that, with the help of crypto, can expand its markets of operation much faster and more efficiently than when working exclusively with fiat. In addition to low commissions and accelerated transaction processing, the transition to cryptocurrency payments allows businesses to expand their target audience, attract new customers, get ahead of competitors, and become more independent from traditional banking institutions.