According to Statista, there are 3.4 million active Crypto wallet accounts. Although this number is relatively small for instance in comparison to the number of credit card users, it is largely underserved as few businesses are willing to start accepting Cryptocurrencies at this point in time.
However, businesses that start to accept Crypto payments are set to benefit from the ever-expanding Digital economy that is being driven by the bullish and maturing Cryptocurrency market. This is because more investors are buying Cryptos, and one of the other uses of Tokens apart from investments, is to pay for goods and services in the online and points-of-sale marketplace.
There are several reasons why enterprises should embrace Crypto payments for success as explained here.
Low Transaction Fees
Compared to conventional payment methods that are supported by mainstream financial players, Crypto payments have lower transaction fees. For instance, Visa and Mastercard charged merchants $90 billion in credit card swipe fees alone which is money that should be part of business profits and not expenses.
Further, some of the costs that are related to traditional platforms include overdraft fees, transfer fees, ATM fees, credit card fees, debit card fees, just to name but a few. Therefore, for every $100 that merchants receive, $4 goes to cater to the myriad of fees that financial companies charge.
On the other hand, Cryptocurrency payment systems such as Bitpay charge fees that range from 0.5% to 1% for each transaction. In some instances, some Crypto wallets can offer zero-fee services which are optimal for cost-cutting.
KYC information such as credit scores, financial information, phone number, addresses and more are often demanded by banks in order for services to be rendered. This compromises privacy and exposes vital data to third parties such as hackers and government agencies.
Meanwhile, virtual currencies do not require as much information as the traditional financial industries even though AML and KYC requirements are now a common feature in Crypto payment gateways. However, unlike the conventional payment solutions, only the wallet address and the transaction ID are used to identify a transaction. In the case of a merchant who accepts Crypto payments, clients are only required to give their shipping address and names in e-commerce.
Digital Payments are based on Blockchain which is a digital, decentralized, and distributed ledger. These transactions are immutable which means they cannot be altered or deleted to misrepresent facts.
Hence, the cases of fraud are greatly reduced and the rampant cases of identity theft where impersonators steal credit card data and borrow against other people’s names can be reduced with more use of Crypto payments. This is due to the fact that online hackers have to change all blocks in the Blockchain to steal them.
Instant Cross Border Transactions
Crypto payments can be sent across the world instantly since there is no intermediary that is needed other than the internet. Hence, global businesses can start to accept Crypto to make it easy for their clients to pay in real time and conveniently.
Chargebacks are scams where consumers buy goods and services with their credit cards only to call their credit card companies to report businesses for fraud. This leads to chargebacks for enterprises which is costly. Since transactions are on an immutable ledger, Crypto payments can purge the chargeback scams to give businesses a lifeline.