Blog article
See all stories »

The Future of Cryptocurrency and its Effect on Worldwide Commerce

Cryptocurrency’s resilience to market volatility remains strong. As the decentralised finance (De-Fi) markets continue to recover from the ‘crypto winter’ crypto’s facilitation in e-commerce is on the rise - with an estimated 100,000 businesses worldwide now accepting crypto payments.

For example, several world-renowned sports teams now accept crypto payments for tickets and merchandise. Microsoft accepts account credit top-ups in Bitcoin, as do AT&T, the third largest US mobile service provider. Equally, Switzerland allows taxes and business expenditures to be filed in BTC. The demand is growing. The market size of the global cryptocurrency payment apps could reach over USD $2 billion by 2023, maintaining a 16.6% CAGR from 2022 to 2023. A few factors are fuelling this growth, namely the adoption of blockchain technologies and cryptocurrencies as an alternative to fiat currencies in emerging jurisdictions, including LATAM and Southeast Asia.

Crypto in payments - demand and benefits

Demand for cryptocurrency facilitation in e-commerce is shared by customers and merchants alike. A Deloitte study from June 2022 detailed that 65% of customers describe being significantly interested in using cryptocurrencies, while 87% of businesses believe enabling crypto provides a competitive market advantage. Additionally, 75% of businesses plan to accept De-Fi payments by 2024.

Crypto payments allow customers to purchase goods and services without worrying about conversion rates, geopolitical dynamics that may impact payment-making, or the securities of particular banks, offering them more flexibility over where and who they purchase from. Ultimately, De-Fi payments remove institutional risk and allow customers to engage with merchants from markets that may not have reliable cross-border banking systems in place.

Blockchain-based crypto assets excel in payment speed, the automated benefits of DLT systems forms a key advantage over traditional finance (Trad-Fi) payments. Some businesses in developing countries may not have stable or reliable Trad-Fi institutions in place, slowing down transaction speed. For this, paying in crypto is a highly effective solution, removing the number of potential intermediaries that slow transaction speed and raising costs.

Not only is it faster to settle, crypto costs less to transact with. For merchants, facilitating crypto payments benefits customer service, growth and scale-up opportunities.

Accepting crypto payments offers more flexibility for customers to pay in their preferred method. When merchants enable crypto payments, they open their business to increased numbers of potential consumers, gaining higher market penetration by reaching customers who prefer to buy in De-Fi coins or do not trust commercial banks.

Current crypto-enabling systems of the payments industry

While banks have been slow to adapt to crypto and its technologies, the payments sector is emerging as a frontrunner for crypto adoption. One of the key roles of payment gateway providers, beyond providing speed and security, is to customise and innovate service offerings based on merchant and consumer demands.

For payment gateway providers, facilitating crypto payments means producing new payment systems, some powered by blockchain, that carry fewer intermediaries and therefore reduce payment costs, time and potential chargeback rates. Usually, but not always, crypto payments are exchanged into FIAT currencies to pay merchants, so innovation from gateway providers has focused on producing systems custom-built for crypto conversion.

The future of crypto payments

Future innovations will prioritise allowing even more cryptocurrencies to be used in payment making and receiving. Advancements to gateway systems will also increase the ease, time and security of crypto payments. 

The current applications of De-Fi technology, crypto offerings, and the relationship between global customers and merchants are not yet fully realised. As crypto adoption among customers increases, demand from merchants to adapt to the consumer’s payment preferences will rise simultaneously.

Crypto itself will benefit from merchant adoption, leveraging the robust operational processes associated with payment gateways. Ultimately, we’ll see the two sectors, payments and crypto, collide in the future. Their gradual progression will increase customer flexibility and global merchant growth. 

11669

Comments: (0)

Now hiring