What is cryptocurrency? It is basically a digital currency that, being ‘decentralised’, is not channelled through intermediaries like banks or governments. Instead, the currency is simply passed straight from one user to another, making it fast and efficient as a form of payment.
Nonetheless, this all only begins to explain why your ecommerce business ought to seriously consider enabling its customers to spend cryptocurrencies on goods or services from the company’s online store.
How cryptocurrency works
With most cryptocurrencies, transactions are recorded on a public digital ledger known as a blockchain. As new transactions are made, new ‘blocks’ are added to the ‘chain’.
Most cryptocurrency units (e.g. Bitcoin or Ethereum) can also be ‘mined’, allowing you to create new coins you can subsequently store and send as you see fit.
Cryptocurrencies worth knowing about
Arguably the best-known cryptocurrency is Bitcoin, which has reached $916.4 billion in market capitalisation. However, there are many other cryptocurrencies you could also potentially take as payment — like XRP, which grew by 9,277% in value from 2017 to 2024.
Even Dogecoin — once more famous for inspiring amusing memes than being a formidable cryptocurrency in its own right — has grown popular among high-profile figures like Elon Musk.
Advantages to accepting cryptocurrency
You might have noticed more and more merchants starting to accept cryptocurrency payments. In 2023, the number of in-person businesses accepting Bitcoin almost tripled, surpassing the 6,000 mark as a result. By following suit, your company could potentially gain the following benefits…
A broader base of customers
Cryptocurrency users are a tech-savvy crowd who also tend to be relatively affluent. As many of these people are actively seeking places where they would be able to spend cryptocurrencies, you can earn the loyalty of these customers for the long term by targeting them early.
No one wants to feel like they are being treated as an afterthought, so you shouldn’t be afraid to chase this market that other businesses might currently deem too ‘niche’.
Lower transaction fees
While a transaction made through a bank can see this middleman take a fee of about 3% to 5%, cryptocurrency fees are generally much lower — in the region of 1%.
Naturally, when your business is shelling out less money in transaction fees, you can appreciably increase your profit margins.
Financial savings on converting currency
As cryptocurrencies aren’t tied to specific countries, they can be used in virtually any territory where the Internet is available.
It also means that cryptocurrency can pass from one country to another without having to be converted in the process, which would otherwise lumber you with exchange rate fees. This can all especially come into its own when you want to reach out to international markets.
Quick transactions
When someone pays online with a credit card, it can take a few days for that payment to go through. Conversely, with cryptocurrency, the transaction is completed almost immediately.
So, you can get hold of the money much sooner — with positive implications for your company’s financial management and cash flow.
Protection against fraud and chargebacks
When money is exchanged as cryptocurrency rather than via a bank, there is less opportunity for would-be criminals to pounce.
Also, cryptocurrency is passed between hands quickly — and once it reaches its intended recipient, the money cannot be refunded, rescinded, or forged. This all reduces the likelihood of you losing the funds to a fraudulent chargeback or return.
Higher security
One simple reason why is that a cryptocurrency transaction is almost impossible to reverse without consent from both parties. Also, such transactions are permanently recorded on the respective blockchain, aiding in transparency.
Your ecommerce website can advertise the security benefits — such as fraud protection — of cryptocurrency payment when drawing attention to this option. This can do your company’s name a lot of good if you set up your online store only recently and it so far lacks an established reputation.
A more futureproof business
Although cryptocurrencies are still somewhat nascent in adoption (compared to mainstream alternatives like credit and debit card payments), they look likely to rise in popularity.
For this reason, it could bode ill for your business to drag its heels in embracing crypto. Remember that in taking advantage of emerging technologies early, your company can help to portray itself as forward-thinking and ahead of the curve.
How to accept payments in cryptocurrency
You can arrange for an external company to undertake ecommerce crypto processing on your behalf. You could get help in integrating a crypto payment gateway with your online store, which would allow your customers to spend crypto coins with ease.
