“Cryptocurrency Payments: Boosting Adoption or Hindering Progress?“
Cryptocurrency enthusiasts often argue that for adoption to grow, businesses need to start accepting crypto as payments. This is believed to boost usability and potentially create strong demand for these currencies. However, if a business accepts cryptocurrency payments only to dump them on the market, it may undermine the entire effort, as the assets are just being sold back right after payment. Moreover, a business accepting cryptocurrency payments through a third-party processor isn’t adhering to the cryptocurrency ethos of managing their own private keys.
Boosting Adoption Through Business Acceptance
On its surface, a business accepting cryptocurrency payments would boost adoption. Still, if the digital currency received is immediately sold back on the market, it’s generating as much demand as it is supply. This simultaneous buy-sell cycle may not significantly contribute to cryptocurrency adoption.
Merchants Accepting Bitcoin Attract New Customers
A study by leading research and advisory firm Forrester Consulting revealed that merchants accepting Bitcoin (BTC) attracted new customers and sales. The study found that cryptocurrency payments bring in up to 40% of new customers for merchants, with crypto customers spending twice as much as those using credit cards.
Cryptocurrency Payment Processors and Adoption
Businesses accepting cryptocurrency payments and selling the crypto right away sends a clear message to the market that they do not anticipate the cryptocurrency’s value to appreciate in the future. According to some experts, it’s a “de-risking move” the business makes.
Crypto Payment Processors as On-Ramps
Cryptocurrency payment processors may allow businesses that do not accept cryptocurrency payments directly to allow consumers to pay with them. Major automobile manufacturer Honda, for example, does not accept crypto payments, but through FCF Pay, people can use Bitcoin and other cryptocurrencies to buy a Honda car.
Adoption Challenges and Opportunities
While there are costs associated with integrating cryptocurrency payments with third-party payment processors, they are still less expensive than processing card payments. Businesses tend to want easy integrations, transaction notifications, and the ability to refund customers and accept payments on various networks, all of which are facilitated by payment processors.
Hot Take: Final Thoughts on Crypto Adoption
Accepting cryptocurrency payments may be challenging for most businesses; what to do with the received amounts may prove just as difficult. Most companies accepting crypto payments convert the funds immediately but what if they didn’t? Despite its challenges, acceptance of cryptocurrencies by businesses plays an essential role in popularizing cryptocurrencies.
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