August 10, 2017
The most sizable advantage of eCommerce over traditional business is the simplification of the point-of-sales systems. It provides solutions like Google Checkout and Paypal, both of which offers lower startup costs, as well as convenient lower credit payments.
But these convenient structures changed when cryptocurrency entered the market. The majority of online retailers use unstable digital currency as a legal method of payment for goods and services. This fact makes retailers worried about keeping up with another payment trend.
While eCommerce experts state that cryptocurrencies like Bitcoin are stable enough to use, online retailers need to do thorough research and test other options before diving into cryptocurrency.
What is Cryptocurrency?
Many people have probably heard about cryptocurrencies. Bitcoin is the most popular, although they aren’t sure what is it or how it works. It is understandable — there are more than 928 cryptocurrencies available as of 2017.
Cryptocurrency, by definition, is a form of transferable encrypted code through devices such as Smartphones. The transaction in these currencies is easy and secure compared to traditional cash and card purchases because it doesn’t require repetitive authentications.
What Potential Does it Hold?
According to a study conducted by Technavio research analysts, the market of cryptocurrency across the globe will grow to an astonishing 19 percent by 2020.
Fast forward to the present time, most consumers and vendors are now adopting cryptocurrency due to the secure transaction that it provides. Its cost may not level with affordable business cards, but its ability to provide easy transactions to the consumers is one of the primary reasons why its market continues to grow by leaps and bounds. Also, the transaction that it provides is instant and does not incur service charges from the banks.
Bitcoin, Etherium, Ripple, Litecoin, NEM, and Dash are among the leading cryptocurrencies that create significant impacts on the market over the last 10 quarters. Most investors believe that cryptocurrency like Bitcoin is a safe investment option because it has the largest market share with a higher acceptance rate compared to other cryptocurrencies.
According to Ujjwal Doshi, the lead analyst at Technavio for entertainment and media research, Bitcoin will experience significant growth for the next few years because of its huge trust factor.
How Will It Benefit eCommerce?
The potential that it holds is unarguable, but the million dollar question here is how it will benefit the eCommerce industry. We will discuss what cryptocurrency means for eCommerce and what it can do to get the most out of shoppers who use cryptocurrencies.
It’s an Innovative Currency
For starters, a cryptocurrency is a decentralized form of digital currency which means it’s entirely online. A centralized banking authority does not govern it, and gold or silver do not back it. Trusted value like U.S dollars back it up and it is traceable through user-maintained ledgers.
Amidst the sea of transactions online, credits and savings ratings are at stake most of the time, so anything that offers high transactional security is a breath of fresh air for the consumers. Of course, no transaction mechanism provides tight security and safety than cryptocurrency itself.
It Has Universal Recognition
For vendors who want to do business on a global scale, the exposure to exchange risks is high, which means that transactions will be affected by different currency exchange rates.
Fortunately, cryptocurrencies like Bitcoin have universal recognition at a given value. It saves time when it comes to segmenting price for transactions and other fees that come from exchanging one currency to another. As it increases its market reach, it will make financial transactions simpler and faster.
Also, cryptocurrencies impose little or no processing fee, unlike traditional credit card processors that typically charge three percent. It could only mean that online vendors will have hundreds and even thousands of dollars worth of savings.
It Provides Secured Ownership
The other benefit of cryptocurrency is that it provides sole ownership compared to other money retaining systems, except for your wallet or wall safe of course.
The traditional liquid asset systems such as credit unions, banks, brokerage houses and credit unions, and even PayPal control your funds and put you under their terms of service. If you violate these terms, they can suspend your account.
However, with cryptocurrency, the owner keeps all the funds on hand, digitally speaking, with no third-party involvements. The only person who can change the terms of cryptocurrency is the owner himself. And this arrangement is beneficial for eCommerce vendors.
It’s Fast and Efficient
Speed is another specialty of cryptocurrency. The process under cryptocurrency takes less than 10 minutes from anywhere across the globe, which is a far cry from traditional payment systems.
It’s good news for online vendors because it means that the income is fast. It’s equally good for consumers because their goods ship quickly. It’s a win-win situation for both parties.
In many ways, the continuous adoption of cryptocurrency by eCommerce vendors and platform providers brings it into the mainstream market. And while this breakthrough is gaining attraction in the media, which spurs new and old investors to put their financial resources into digital forms of currency, it’s still up to the vendors how to leverage it and make it work for their businesses. Its structure is complex, but the way it works is straightforward.
Maria Estrada is an affiliate of Print Meister, a print advertising company situated in Australia that provides quality but cheap business cards, flyers, etc. Apart from devoting her time to her corporate job, Maria is also a writing enthusiast and loves to write just about anything related to advertising, Web design, and technology and shares them with her readers. You may connect with Maria on LinkedIn.