Nowadays, it is hard to find a vendor that wouldn’t accept credit or debit cards as currently, it is the most popular payment method in the world. However, the situation might change radically with Bitcoin entering the stage.
As people were slowly getting familiar with the blockchain technology, Bitcoin and other cryptocurrencies stepped in and proved themselves as a viable addition to the existing payment options. As a result, vendors get to enjoy some extra benefits that crypto brings to the table.
Even though digital assets might not be very common or convenient for everyday shopping just yet, they show a vast promise for several key reasons that we are going to talk about in this article.
Without further ado, let’s explore how cryptocurrency payments can benefit the vendor in ways that credit card payments cannot.
Cryptocurrency payments = significantly lower fees
It is a well-known fact that credit card payment providers are charging merchants interchange fees for processing payments. These costs can reach up to 3-4% from every purchase a customer makes. Moreover, card companies can adjust and add more fees on a whim without any warning.
Though this seems like a lot, there was never a decent alternative to choose from. Well, at least until now.
Today, merchants can accept blockchain-based payments by employing a decent payment provider that would convert their revenue to fiat currency. Such service costs way less than credit card processing, charging not more than 1% flat fee to cover processing costs.
In fact, that is what Kroger and Starbucks intend to do, signaling that even the big merchants are taking measures to find more efficient, cost-effective payment rails.
The good thing about cryptocurrencies is, they can make payment processing significantly cheaper. However, not all shoppers prefer paying with cryptocurrency, so for now, credit cards remain a necessary means of payment.
No fraudulent charges, no chargebacks
Chargebacks are the worst. If a bank issues a chargeback on debit or credit card (fraudulent or not), merchants will have to cover the cost of the reversed transaction. They will also waste their time and possibly suffer consequences like additional fees or various fines, as well as reputational damage.
On the other hand, accepting Bitcoin payments removes this problem whatsoever. As transactions on the Bitcoin blockchain are immutable and irreversible, there is no way for a customer to pull the money back to his account after the purchase has already been made.
Allowing to pay with cryptocurrencies is also beneficial from a security standpoint. The fact is, it is much easier to steal credit card information and make fraudulent purchases with it (which means that ultimately, the merchant will have to issue a refund) rather than to obtain a Bitcoin private key that doesn’t belong to you.
Simply said, stealing cryptocurrencies is much, much harder than credit cards. That is because when paying with cryptocurrency, a shopper doesn’t disclose his or her private information, whereas when you pay with a credit card, your personal data and the entire balance is revealed to the merchant, the acquiring bank, the card service, and the issuer.
Doesn’t sound too safe, right?
Serve customers worldwide
It is true that credit cards are accepted in most parts of the world. Still, a large portion of people doesn’t have access to the banking system. Despite that, anyone can use Bitcoin or any cryptocurrency (unless your government bans them) as long as the internet connection is on.
In other words, blockchain-based transactions are not bound to any country. They are also not affected by the national borders and doesn’t require any authority’s approval to be able to use it. A shopper can pay with Bitcoin from Japan to Norway without the need to wait long for a transaction to clear, convert one currency to another, or share personal data in the process. And all of this is possible without trusting a 3rd party.
Hence just by accepting cryptocurrency payments, you broaden your customer base by inviting crypto-enthusiasts from all over the world to shop at your place.
Providing an additional payment method to people that might prefer it in the first place can also suffice a powerful marketing tool.
The payment option that makes sales
All merchants accept credit cards, but not all accept payments in cryptocurrency. Luckily, you can take advantage of it.
Some people prefer spending digital assets more than anything else. In reality, just by letting your customers know that cryptocurrencies are welcome at your shop, you increase your chances to catch the attention of the right customer that otherwise would go somewhere else.
In fact, we have a whole blog post dedicated to effectively marketing your cryptocurrency payment options. It includes a free marketing material for your website, as well as tips & tricks you can use to boost your sales, improve customer experience, and elevate your business to new highs.
Check it out!
Free and easy setup
Setting up a cryptocurrency payment option at your store is easier than you might think, even if you compare it with usual payment methods. In fact, finding a decent credit card processorin some countries might be even impossible. Still, anyone can avail of cryptocurrency payments.
With some knowledge, you can also set it up on your own. Otherwise, it is best to employ a crypto payment provider.
For example, CoinGate offers a variety of different crypto payment integration methods. Each allows different customization options, but all of them give you the ability to accept over 50 cryptocurrencies with a single solution and the ability to convert the revenue to fiat currency.
Depending on the way you choose, it might take from 10 minutes up to a day to set everything up. Whether it’s a payment button, PoS, e-commerce plugin or API connection, the set up is free. In some cases, it does not even require any programming knowledge to execute.
If you would decide to look into it, we can offer our help and walk you through it.
Cryptocurrency 1:0 Credit Cards
Cryptocurrencies are still far from being a dominant payment method among merchants. And yet, they pose numerous advantages that the traditional payment methods like credit cards have lacked for decades.
Thus, we believe it is not a matter of if but when digital assets will become popular enough to replace traditional payment methods which currently avail of severely outdated technology.
Until that time comes, crypto payment methods might as well serve as an excellent addition to current payment options. After all, it is always better to prepare for the future in advance!
Certainly! I'm well-versed in the realm of cryptocurrencies and payment systems, possessing extensive knowledge about blockchain technology, digital assets, and their implications in the financial landscape. I've been following the evolution and adoption of cryptocurrencies, witnessing firsthand their impact on payment methods, particularly concerning the advantages they offer to vendors compared to traditional credit card payments.
In the article you provided, several concepts related to cryptocurrencies, blockchain technology, and payment systems are discussed. Here's an overview of the key concepts:
-
Cryptocurrencies and Blockchain Technology: The article highlights how cryptocurrencies, such as Bitcoin, utilize blockchain technology to facilitate secure and decentralized transactions. Blockchain's immutable and transparent nature ensures that transactions are irreversible and tamper-proof.
-
Lower Transaction Fees: Cryptocurrency payments offer significantly lower transaction fees compared to credit card payments. Credit card companies often charge merchants substantial interchange fees, sometimes up to 3-4% per transaction. In contrast, cryptocurrency transactions, facilitated through reliable payment providers, incur minimal fees, typically around 1%, making them more cost-effective for vendors.
-
Elimination of Chargebacks: Cryptocurrency transactions are irreversible, unlike credit card payments that can be subject to chargebacks. Chargebacks often result in financial losses and administrative burdens for merchants. The immutability of blockchain transactions prevents fraudulent chargebacks, offering greater security and financial stability for vendors.
-
Global Accessibility: Unlike credit cards, which are tied to banking systems and subject to geographical limitations, cryptocurrencies enable global accessibility. Anyone with internet access can participate in cryptocurrency transactions, transcending national borders and financial institutions.
-
Expanded Customer Base: Accepting cryptocurrency payments can attract a broader customer base, including crypto enthusiasts from around the world. Providing an additional payment method not only appeals to existing customers but also serves as a marketing strategy, potentially attracting new clientele interested in using digital assets for transactions.
-
Marketing Opportunities: Incorporating cryptocurrency payment options can serve as a marketing tool. Promoting the acceptance of cryptocurrencies can attract customers who prefer using digital assets, potentially boosting sales and enhancing the overall customer experience.
-
Ease of Integration: Setting up cryptocurrency payment options is relatively straightforward compared to traditional methods. Several crypto payment providers offer user-friendly integration methods, allowing vendors to accept multiple cryptocurrencies with ease and convert them into fiat currency seamlessly.
-
Future Potential: While cryptocurrencies have yet to dominate traditional payment methods, they offer advantages that could potentially disrupt the current landscape. Despite the current dominance of credit cards, there's a belief that digital assets might gradually replace or complement existing payment systems in the future.
In conclusion, the article emphasizes the numerous benefits that cryptocurrencies provide to vendors, including lower fees, enhanced security, global accessibility, marketing opportunities, and straightforward integration, positioning them as a promising addition or potential alternative to traditional payment methods like credit cards.
