Bitcoin can get a lot of attention, but it’s only part of the larger digital currency equation.
In the drive to bring crypto into the wallets of consumers and, in turn, into the tills of merchants, it will be essential to expand acceptance while increasing the ease of use of spending.
To that end, BitPay CEO Stephen Pair, Fancy CEO Greg Spillane, and Jomashop VP Alex Sternberg said in the latest On the Agenda that the shift from hype to daily commerce will unlock billion dollars in purchasing power.
It’s been an intoxicating race for cryptos, to put it mildly, as their price has rocked wildly – largely thanks to a stream of Elon Musk’s tweets and emojis on Bitcoin or Dogecoin.
Cryptos have captured the public imagination so much that, as PYMNTS discovered, only 8% of the population has do not heard of bitcoin or its peers.
Spillane noted that “there is so much buzz. There are so many different types of coins, and every day it seems like there is new hype and buzz surrounding another coin coming out. “
Beyond speculation lies the prospect of expenses cryptos, in a way that integrates digital offerings into mainstream use cases.
The desire is there, and the advance towards the general public is there too. As PYMNTS research has shown, 16% of the US population – roughly 30 million consumers – own cryptocurrency, and around 24 million consumers plan to acquire crypto in the future.
A significant number of consumers – 45 million of them, or 18% of the population – have used bitcoin and its brethren to make purchases. Said Pair of these numbers: They are not all this surprisingly, and the intention to buy and use crypto cuts among young and old, as well as in industries ranging from traditional retail to car dealerships.
“Over the past couple of years, we’ve been really talking about the number of crypto users that number in the tens of millions, and for traders who use our platform, our goal is to help them reach this new demographic. users and make their products and services known to these new consumers, ”said Pair.
Consumers willing to spend
Panelists noted that individuals want to find a way to spend “dry money” – a euphemism for the savings and money they have amassed during the pandemic – in new digital ways, especially as the value of their crypto holdings increases. They want to spend their capital gains, said Pair.
This brings us to an age where, for example, Dogecoin can move from a coin to an alternative payment method (Pair said that Doge, in recent months, has gone from 2% of transactions on the platform to about 12% in a matter of a few weeks). And that’s why, as PYMNTS discovered, 64% of customers say they bought crypto with the intention of being able to spend it.
Jomashop’s Sternberg said consumers were increasingly interested in leveraging their crypto into their daily spending, with money stored in digital wallets, going beyond P2P activity. Purchases on Jomashop run the gamut, from $ 100 sunglasses to watches retailing for thousands of dollars, according to data from PYMNTS which shows a range of purchases bundling under $ 100.
Fancy’s Spillane noted that the biggest crypto purchase to date was for a $ 27,000 Hermes bag – although the average order size was around $ 100. Volumes increased as average order volumes for items purchased with crypto quintupled.
“So there is tons of money out there,” he said. don’t grasp that. “
Traders would do well to consider accepting crypto, the panel said, because 51% of crypto owners would be more likely to shop from a retailer that accepts it.
Acceptance can be seen as a form of competitive advantage, at least for now, Sternberg said. “But at the end of the day, as cryptos become more mainstream, they will just be another form of alternative payment that will look like a credit card,” he told Webster. “It’s going to become something like an Apple Pay transaction.”
Spillane said about 30% of his own company’s customer base is international, with consumers in more than 140 countries. An increasing percentage of purchases are made with cryptos, prompting traders to accept them.
But there is another incentive that will broaden acceptance, he said: Cryptos have strong anti-fraud characteristics in place, especially with cross-border transactions, which have been marked by relatively high fraud rates. (Pair said that just a few years ago, up to one in 50 card transactions made internationally were fraudulent, a number that has increased as commerce has moved online.)
Pair also noted that crypto payments are akin to cash or wire transfer transactions. They are immutable (moving like they do on blockchains), eliminating the specter of chargebacks (or friendly fraud), which reduces the cost of doing business for merchants.
These benefits, Pair claimed, make cryptocurrency at the register the leading form of alternative payment in some verticals, rapidly rising from single-digit percentages to 10% or more in cash volumes in a short period of time.
The appeal of crypto is also becoming apparent in B2B, said Pair, where businesses have found it attractive to be paid in digital currencies rather than going the bill / check or card route, where transactions take days or months to resolve.
“In parts of the world where the banking system is more developed, they don’t realize that there are parts of the world where there just aren’t great payment options,” said Pair.
Traditional payments are slow, expensive, or both. In this context, stablecoins are proving to be a wise choice for companies that don’t want fluctuations in bitcoin and other cryptos to impact their balance sheets.
“We really want buyers to be able to pay in whatever currency they want to pay in and recipients to be able to settle in whatever currency they want. they or they prefer, ”said Pair of these B2B transactions.
In consumer-led commerce there are always inherent frictions in the process, of course, where in most cases it has been necessary to put fiat in a digital wallet. Buy cryptos on an exchange and have those cryptos converted to fiat at the merchant as the transactions are completed.
Pair noted that there have always been crypto users who want to use crypto, “and just crypto. They want to live their whole lives with it,” he said – and in some cases, they might even consider getting their wages paid in crypto if that was an option. These users are looking for traders who will accept cryptos as direct payments – and if they can’t do that directly, they’ll link debit cards (a Mastercard debit card, for example) to wallets and wallets to platforms, and will follow this route.
As with any online transaction, friction can be the deciding factor in adopting or rejecting crypto as a payment method. In other words, or they buy business.
As Pair said: Where they make that first purchase could be the difference between them and keep making that purchase over and over – or not. “If they have a good experience with that first payment, then they’re more likely to do it again,” he noted.
Sternberg of Jomashop said the payment mechanisms are getting simpler as consumers can cash out digital wallets, plug in different cryptos, and verify with just a few clicks, a process that appeals to both the consumer and the merchant. The fewer steps there are in the payment process, he said, the more transactions there will be.
Looking ahead, Fancy’s Spillane said crypto will become a “de facto” payment choice. “There’s a lot of money these young consumers have ‘locked away in crypto,’ he noted, ‘and they’re looking for ways to spend almost turnkey. It’s exciting.’