[container section_title=’Container’ fullwidth=’no’ bgtransparency=’0′ top=’20’ bottom=’20’ innerbottomshadowsize=’0′ bordertop=’0′ borderbottom=’0′ collapse=’false’][column type=’12’ last=’1′][title fontfamily=’Muli’ textcolor=’#8224e3′ th_height=’10’ th_margintop=’5′ th_bgtransparency=’0′ th_bgpattern=’3′ animation=’default’]Ecommerce and cryptocurrencies: Four reasons to accept them[/title][text google_font=’Muli’ transparency=’0′ animation=’default’]
The potential of bitcoin and blockchain technology is exceptional and growing every day. Find out how cryptocurrencies can innovate e-commerce.
Cryptocurrencies are beginning to permeate the world of payments in all its forms. From the simplest of use cases, that of in-store payments, to the more complicated (at least so far) transactional operations.
Although the two operations are completely different in terms of utility and user experience, there is certainly a key point to be underlined in case these operations are carried out on traditional financial channels or on blockchain: the absence of intermediaries .
Let’s take the two use cases:
- Case A : Ali who goes shopping at the supermarket near the house
- Case B : Mike (a foreigner) who must transfer funds to Turkey from Germany for the purchase of a textile product.
In the case of using traditional financial channels (A) and imagining that the Ali pays by credit card, the intermediaries involved in the best case scenario are:
- The Ali’s bank (issuer), which will approve the payment
- The bank of the supermarket (acquirer), which will communicate the payment to the merchant
- The Settlement bank, which will handle the financial transaction between the two banks
- The circuit of cards to which the Ali is leaning
For case B, assuming that the Mike relies on a classic money transfer service, the intermediaries involved in the best case scenario are:
- The Mike’s bank
- The Germany bank of the Money transfer service
- The Money transfer service
- The Turkish bank of the Money Transfer service
- The Turkish bank of the textile seller
In both case A and case B, we hypothesized the simplest case, but other intermediaries could be involved (e.g. foreign exchange services).
In the event that the transactions were to be carried out on the blockchain, both for case A and for case B, the intermediaries would be:
- Ali or Mike’s wallet
- Supermarket wallet or textile sales services
Here, too, this may be slightly complicated with some intermediaries (e.g. an actor who collects and reports payments to help the merchant) but it is clear that the number of actors involved is significantly reduced.
What does this mean?
In general, the advantages are:
- More Speed
- Less costs
- Interoperability
To see more in detail the advantages of this solution, we thought to bring a case that in our opinion is the one towards which cryptocurrencies can bring the greatest business advantages: the world of eCommerce payments.
The eCommerce world, by its nature, needs to be: international, efficient, secure, capable of attracting new customers and at the same time providing these users with a fast and frictionless shopping experience.
Let’s assume that, Turkish eCommerce with a large presence in foreign markets that decides to accept bitcoins. Here are the main advantages that it can derive from it:
Internationalisation
The currency, if we want to call it, is one and only one: bitcoin.
1 bitcoin = 1 bitcoin in Europe, the Americas, Asia, Africa and Turkey.
How many times are eCommerce managers forced to give up the opening of new markets due to the difficulties in managing the currency? First, you need to find a supplier capable of accepting over 120 world currencies, second, you need to count the costs that this supplier charges for the management of these conversions, third, you need a complex reporting system that helps the administration to reconcile invoices and cash in.
By accepting bitcoin, the payment confirmation corresponds to a confirmation of the collection, wherever the buyer is and in any wallet, his cryptocurrencies are deposited, without any cross-border commission
Efficiency
The management of resources and margins is fundamental in order to invest in a good user experience of the site. Having to load between 1 and 5% of the order total simply for the execution of the financial transaction can therefore often result in serious damage in the budget and in the economic plans of the stores.
With traditional payment channels we have seen that the intermediaries to be involved are manifold, consequently, each of these must be (rightly) remunerated, and the costs clearly rise.
With bitcoin, the only native fee is the one necessary to sustain the system, which is self-managed through an automatic remuneration system for the “miners”, ie those who are providing the calculation capacity to allow the recording of that transaction in one of the blocks of the chain.
Safety
Once the bitcoins are registered on the wallet of collection, there is no way that they can be withdrawn from it without the authorization of the owner. The unchanging nature of the blockchain makes an attack physically impossible resulting in tampering with the entire chain.
Security is not only that of the merchant, but it is also that of the payer, having ascertained the bitcoin address of the merchant, there is no way that the amount that is being transferred is diverted to some other address.
New customers
If there is someone who wants to buy online, for sure this is the bitcoin user. How many times do you try to identify your “buyer person”? For an eCommerce, the fundamental obstacle in identifying its target is to make sure that the potential customer does not worry about the use of his payment data on the net. Who is less afraid if not the “early adopters” of such a new technology? Between 2018 and 2019, the number of people who have transacted in cryptocurrencies has doubled, and similar numbers are also expected for 2020 in spite of the corona.
Accepting bitcoins, if well advertised, can be a huge competitive advantage at a time when there are still few to accept these transactions.
These are just some of the aspects that lead us to think that one of the main development channels in the bitcoin world could be that of eCommerce, but first, you need the first courageous shops ready to accept this challenge and who knows, maybe even win it.
At the moment, the providers able to assist eCommerce in this challenge are still few, and it should be emphasized that the issue also brings up some critical issues, buyer protection, dispute management, reporting, etc. …
We can also help you compare other available options that may be more suited to your needs and situation. Contact us, it will be a pleasure to serve
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