E-commerce has changed the landscape of shopping for all internet users. You can buy anything from a pizza to a Porsche at the click of a button. Several software applications exist that make making payments for customers secure and fast. However, when it comes to security, nothing can match Cryptocurrencies. Several platforms including iOS and Android support Cryptocurrency-based transactions. The fusion of Blockchain application development technology with e-commerce has changed the way we see and use e-commerce platforms.
How is Cryptocurrency Changing Online Payments?
You might wonder why you need to think about Cryptocurrency and Blockchain at all if you are a regular shopper. Well, think about buying something that you would not want to show up on your credit card report. What about erotic costumes or sex toys? Many people around the world carry out transactions like these with merchants that accept Bitcoin, Ether, Dogecoin, and Litecoin. Most of these merchants do not have any preference of cryptos. They usually accept all popular ones.
It is a win-win situation for drop shippers, online entrepreneurs, and e-merchants. To date, a majority of them have used PayPal and credit cards to complete their business transactions. While the minimum fee is around 2.5%, the charges can increase significantly for international payments.
Additionally, every busy entrepreneur has faced the brunt of PayPal limit at least once in their lifetime. So, when Bitcoin launched in 2009, the e-merchants experienced new-found freedom. They were finally the master of their own transactions, and they had complete control over the amounts they dealt in.
What are the Advantages of Using Cryptocurrencies for Making Payments?
Now, it is imperative that you do not confuse Cryptocurrencies with digital currencies. Almost all users have digital money which are the funds present in their bank accounts. They can access it through multiple online portals, so the netizens refer to it as digital currency. However, only the most open-minded few fintech companies and banks have adopted Blockchain to secure their transactions. Cryptocurrencies do not require the authorization of any bank, and they are not dependent on fiat currencies. For example, Bitcoin, which has real value in the virtual world but in the real world, it is intangible.
For example – you want to pay for the round of drinks at the pub; then you can access your Bitcoin wallet via your mobile and make the payment. You can pay for several online services, buy rare edition comic books, bid on closed auctions for niche collectibles by using Bitcoin or similar Cryptocurrencies.
What are the Cons of Virtual Currencies You Should Know?
It is indeed amazing for the paying customers since they don’t have to divulge their geo-location or use their net banking details, but why should a merchant accept Cryptocurrencies? Did you know – over 1000 crypto startups and Blockchain businesses have failed in 2018? Although this year is being hailed as the year of the ICO, the number of unscrupulous pump and dump schemes are increasing by the day.
It is impossible to trust a new crypto startup without knowing enough about the Blockchain tech they are using, the fundamentals of cryptocurrency and their company’s ICO framework. On the one hand, we have market experts like Jordan Belfort (The Wolf of Wall Street) calling ICOs the biggest scams in the history of market and trade. On the other hand, we have Cryptocurrencies that can fluctuate anytime.
What Happens When the Value of Alt Coins Fluctuate?
Today, the status of all Cryptocurrencies including Bitcoin is highly volatile. The value of each virtual currency fluctuates rapidly beyond comprehension, and the algorithms that predict the valuation of leading cryptos are not always accurate. On top of the unpredictability, the drastic actions taken by national governments to control the virtual currencies in their country have a profound effect on the market value of each Cryptocurrency. That puts every online merchant, who accepts virtual currencies in a dicey situation.
One question that keeps coming back – do these merchants stand to make a greater profit from the high fluctuation rates of the Cryptocurrencies? Well, yes and no. Just like everything else about virtual currencies, the answer to this simple question is undoubtedly complicated. An online merchant will make a profit when the value of the virtual currency is on the rise. However, when the value dips, the merchants have to brave the losses from the most recent sales, since they have no way to go back and ask for more Altcoins to make up for the real market value of the sold product or services.
Only a Few Countries Around the Globe Are Crypto-Friendly
Because of this fact, you will find that only a handful of merchants accept Altcoins today. That is why you are more likely to come across only a few online vendors on Craig’s List and the Deep Net, who are ready to deal in Cryptocurrencies in place of real money. Only those, who are interested in preserving their anonymity, are inclined towards transacting in Bitcoin, Litecoin, Dogecoin, and Ethereum. VPN service providers value the anonymity of their clients beyond anything else. Hence, you might find a few providers that accept payments in Altcoins.
That is true for most of the USA. However, if you are in Europe, you will find several registered and reputed online platforms that deal in Altcoins. These e-commerce stores may sell everything from luxury goods to household commodities. Currently, over 80,000 merchants in Europe accept cryptocurrencies.
You can enjoy upgrades to services on dating applications like Badoo. Customers can buy used or new electronics at CeX for Bitcoins. You can book airplane tickets by paying in altcoins at the LOT Polish Airlines website. T-Mobile Poland, RE/MAX London, PSP Mobile, Euro Pacific precious metal dealer site, Yatch-base.com and a majority of the European vendors on Etsy also accept payments in a plethora of Cryptocurrencies that preserve the privacy and security of the buyer. A few European e-merchants also leverage the services of crypto payments platforms. A recent partnership between CoinGate (a payment gateway for cryptocurrencies) and PrestaShop (an e-commerce platform) is expected to reach 80,000+ European e-merchants.
Still, Majority of Merchants are Afraid to Accept Cryptocurrencies
Most of the merchant’s around the globe still hesitate to accept payments in cryptocurrencies. Apart from the turned off due to the volatility, these merchants do not understand how the technology works.
As a vendor, you can allow payment for your products and services in Altcoins, even after considering the fluctuations. Because today, many people have Cryptocurrencies in their wallet, but they don’t have enough places to spend them. This is a huge market that is still untapped. By giving an option to pay via Cryptocurrencies, you can definitely reach out to a new customer base.
Final Words
As long as you value convenience over the risks these cryptocurrencies pose, you are in the perfect time and position to use these virtual currencies. In the case of conventional payments, several parties are involved. The customer makes the payment that goes through a third-party account before approval and disbursal to the vendor. Some PayPal users have gotten into trouble over the last couple of years and lost thousands of dollars due to discrepancies with limits. Using Cryptocurrencies not only reduces this risk, but it also cuts down the processing fee and transaction cost.