Over the past few decades, we’ve seen a lot of changes… and I mean A LOT. We’ve gone from the invention of the internet to being able to order everything online in the blink of an eye (thank goodness for Amazon!). We’ve also seen the introduction of tons of new and interesting concepts, including cryptocurrency.
Cryptocurrency is a form of decentralized currency that holds its value based on its popularity and can’t be regulated by any one government.
But what does that have to do with eCommerce?
And with the recent Crypto crash, how does that weigh on the adoption into eCommerce? ASAR Digital is here to break it all down, including why the recent dip could actually speed things up.
Crypto does what again?
Before we jump into talking about the massive splash crypto will indeed be making in the eCommerce space, we should have a conversation about what crypto can do (just to make sure we’re on the same page).
Crypto, also called cryptocurrency or digital currency, is essentially decentralized money.
It’s decentralized because it doesn’t rely on one single entity or government to regulate or control it. It can do this through the use of a blockchain, essentially a massive network of computers all over the world. These computers work together to record the transactions that happen, such as sending money to a friend, or buying something from a store.
Cryptocurrency was created this way for a reason. Its main purpose is to give people the ability to trade goods and services without relying on banks, payment processors, or governments. This provides a faster and more efficient payment process, allowing businesses and individuals to send and receive money faster and cheaper than traditional payment systems.
While crypto is still relatively new, several blockchains and cryptocurrencies have been around since as early as 2009. Since then, they’ve proven to be a reliable payment method and have continued to increase in popularity. In fact, several countries have even adopted certain cryptocurrencies as a legal tender.
So what does this all mean for eCommerce?
Crypto’s impact on eCommerce
Now that you’ve got an understanding of how crypto works, let’s look at how that relates to eCommerce.
Because of the way crypto functions, it creates a quicker and more convenient method of payment. Instead of having to worry about exchange rates and waiting on money to be taken out of your bank account, you can simply dish out a few crypto coins to get that new sound system!
Here are some specifics on how crypto can (and has) affected the future of eCommerce:
If there’s one thing the internet has instilled in us, it’s the expectation that things should go fast. Amazon is one of the major players in this movement; after all, Prime shipping simply can’t be beat.
But Amazon’s size allows it to process transactions a little differently than most online stores. Let’s look at a smaller example:
With most online retailers, there is an order of operations. First, the customer places the order. Then, both the retailer and the customer must wait for the money to clear (2-3 days) to ensure you have been paid. Then, the store begins processing the order. After processing is finished, the item is shipped!
With crypto, however, you can eliminate that initial waiting period and get your items shipped faster! Instead of waiting five days for shipping (half of which are spent twiddling thumbs and waiting on banks), you could have the item to your customer in two days! Over time, this gives you the opportunity to generate more orders and greater sales.
Smaller purchasing fees
Okay, transactions go faster. What’s next?
Well, as it turns out, cryptocurrency can also lower purchasing fees!
Consider how, when paying online, you’re often met with outrageous debit card fees from your payment software provider. These fees can change depending on your location and what software you’re using, but you get the point.
With crypto, though, the fees are virtually nothing. Because sending crypto from one wallet to another is so easy, the transaction fees are practically nonexistent!
This, of course, depends on whether you are accepting crypto to your wallet directly or through a third-party gateway (similar to how Stripe or Paypal are third-parties), but the fees are lower in either case.
Here’s the big one: by using crypto on eCommerce sites, purchases are going to get way more secure.
Because crypto has fewer access points than traditional banking, there are fewer opportunities for hackers to swoop in and swipe your funds. Additionally, it helps to prevent eCommerce fraud.
You know those times when your customer pays you, receives their item, then files a chargeback with their bank—and you can’t do much of anything about it? With crypto, that can’t happen. There’s no middle-man (like a bank), so any disputes are between you and the customer directly.
For online business owners, it’s important to make ordering and paying as convenient as possible for your customers. By accepting cryptocurrency, you open yourself up to an entirely new demographic of tech-savvy spenders.
This also allows you to accept customers from nearly any part of the world without having to worry about things like exchange rates.
That’s right! With crypto, exchange rates don’t exist!
Last, so how does the recent Bitcoin crash, impact crypto’s future with eCommerce? Well, in terms of consumer access, the lower affordability of crypto ‘prices’ may bring new investors into the Cryptocurrency market, thus expanding the pool of potential eCommerce crypto adopters.
Let’s wrap it all up
You don’t have all day to sit here and read this article, so let’s revisit the main points.
ECommerce has existed nearly as long as the internet. Over its lifespan, it has changed in ways no one could have ever predicted. But with crypto on the horizon, eCommerce is about to get a whole lot better.
Gone are the days of worrying about trivial things like transaction speeds, fees, and exchange rates. This gives you time to think about things like growing your business in the digital world. In other words, you get to focus on what really matters: customer experience and efficiency.
–Author, CJ Miller