The reality is the future is now as ecommerce businesses large and small have already embraced cryptocurrency for online transitions, selling everything from jewelry to electronics.
Some of the major companies that have jumped on the crypto-ecommerce bandwagon include Overstock.com, Expedia, Dish Network, Newegg and even Microsoft. And now, with leading cryptocurrency payment provider CoinPayments' May 2018 tie-up with popular ecommerce platform, Shopify, online merchants who use the cloud-based, multichannel ecommerce software maker can accept hundreds of types of cryptocurrency payments. Shopify, which powers some 600,000 primarily small business merchants—and also multinational giants General Electric, Nestlé and Budweiser—has opened up the world of cryptocurrency to many more sellers.
Whether or not you should consider accepting cryptocurrency payments on your ecommerce site depends on your business, your customers, and your tolerance for the extremely volatile nature of digital currencies. But here are four reasons why cryptocurrency goes hand-in-hand with ecommerce:
- More Affordable Transaction Fees
Credit card merchant accounts and other ecommerce payment processing services charge an average of about 3% per transaction, with some adding a markup, plus monthly fees. For example, PayPal and Authorize.Net both charge 2.9% + $0.30 per transaction. These fees can add up quickly, putting a significant damper of profits and even making certain transactions cost-prohibitive. By accepting a crypto like Bitcoin, you can slash processing fees. The leading Bitcoin payment provider, BitPay, charges a flat 1% for Bitcoin payments. Some blockchains have even lower fees and a few waives transaction fees altogether.
- Get Paid Faster
For many ecommerce businesses, having quick access to cash to put back into the business can mean the difference between success and failure. Accepting cryptocurrencies can give you another option for accepting payments that generally operates must faster than the traditional credit card merchant accounts. Unlike processors who lock up funds for a week or more in case there's a chargeback, Coinbase, operator of the largest U.S. cryptocurrency exchange, for instance, makes funds from purchases made with a credit or debit card instantly available.
- Reduce Instances of Fraud
Chargebacks are a serious issue in ecommerce that can result not only in a loss of revenue, but added fees and other pains that can include problems with banks viewing you as an unreliable merchant. According to a LexisNexis study, each dollar of fraud costs merchants $2.40, meaning $100 fraud would cost an ecommerce business $240. Accepting cryptocurrencies eliminates chargebacks because all crypto transactions are irreversible. This is because of the blockchain infrastructure, which records transaction into a coded cryptography system, making chargebacks impossible. Refunds can only be provided by merchants sending payments to customers.
- Opportunity for Global Expansion
Accepting cryptocurrencies means your ecommerce business will no longer be tied to the US dollar, or the specific other currencies supported by your payment processor. It also eliminates the need to convert between different currencies and losing funds on transactions due to fluctuations in the foreign exchange market. The borderless nature of cryptocurrencies also lets you side step the fees, time and fraud concerns that usually come with doing international business. Additionally, Asian countries including Japan, China and India, crypto ecommerce is already leaps and bounds ahead of the United States by some measure.
Even if you’re a marketer or seller who still doesn't know the difference between Bitcoin, Litecoin and Ethereum, it could be time to look into accepting cryptocurrencies on your ecommerce site.