The Rise of Cryptocurrency Payments: A Game-Changer for Businesses

As cryptocurrencies continue to take the world by storm, their acceptance by businesses as a form of payment also shows a promising trend in the financial and commercial sectors alike.

One of the major reasons that many businesses have decided to embrace crypto as a payment method is the potential for significantly reduced transaction costs. While traditional payment methods, such as credit card payments, involve the fees of banks and payment processors, cryptocurrency transactions offer lower fees.

But beyond this key factor, which is driving acceptance, are many others able to possess the power to change the payment landscape indelibly.

Embracing Crypto as a Payment Alternative

We have all experienced the evolution of e-commerce, with the major giants constantly improving various aspects of the online shopping experience, but especially payment methods. Offering several benefits, the acceptance of crypto as a payment option has seen adoption from the travel, car, food and beverage, and telecommunications industries as well.

The borderless nature of crypto means that it can be accessed and used worldwide, making it an attractive payment option for businesses with international customers. The complexities associated with currency conversion are effectively eliminated, and cross-border transactions are made possible without the need for intermediary banks.

Speed and efficiency are yet further attractive qualities of blockchain technology, enabling businesses to receive payments almost instantly and reducing the typical delays associated with traditional banking systems.

Finally, and perhaps a more overlooked benefit, is that by embracing cryptocurrency payments, businesses position themselves as forward-thinking and innovative. This can enhance their brand image and signal adaptability to emerging trends in the financial and technological landscape.

But hold your horses! We aren’t there just yet!

Infrastructure and regulation are most likely the most significant challenges that the industry must overcome if crypto payments are to become more mainstream.

The regulatory landscape for cryptocurrencies varies by country and is continually evolving, which means that being compliant isn’t an easy feat. While countries such as the USA have brought the topic of digital assets to the national stage, others such as Switzerland are more crypto-friendly, and as of yet, no global standard exists.

Meanwhile, the high risk of hacks, scams, and phishing attacks is also important to keep in mind, with businesses needing to be adequately prepared with secure wallets and systems. Accounting and taxes must also be considered from an administrative perspective, making the process of accepting crypto payments an arduous task in 2023.

Despite this seemingly hostile environment, such big-name brands as Ferrari officially announced their acceptance of crypto as a payment method, Liechtenstein’s government published their plans to accept Bitcoin, and Alchemy is bringing crypto payments to Burger King!

Common Crypto Payment Methods

It’s important to note that paying in crypto goes beyond online purchases and also includes direct peer-to-peer payments, crypto debit and credit cards, online bills and subscriptions connected to wallets, and more.

One particularly big move is Shopify’s connection with Solana Pay, with the integration of the plug-in enabling users to make payments in USD Coin (USDC). According to Patrick Hansen, Solana and Circle’s Director, EU Strategy & Policy, this new integration reduces the average cost per transaction to $0.00025, compared to 1.5% and 2.5% fees for credit cards.

“2023 has been a particularly exciting time for those in the crypto payments sector,” says Yang Lan of Fiat24 in Switzerland. “Some of the partnerships we have seen between TradFi staples such as MasterCard and Visa with blockchain-based companies would have been impossible to imagine just a few years ago. The acceptance of e-commerce giants and offline retailers alike makes us very optimistic about the future use of digital assets in everyday life, and that is what we are working towards. Making everyday spending with crypto easy and convenient.”

Future Forward

2024 is expected to see the importance of crypto payments continue to grow even more, with more businesses adopting cryptocurrency payment gateways, having learned the lessons of 2023.

Major gateways have made it possible for businesses to accept crypto without the hassle of creating their own crypto payment system, and thanks to this, merchants may not need to wait much longer before being able to tap into a new crypto audience.