Everyone has heard about Bitcoin – and some people even understand how Blockchain works – but is the time now ripe for retailers to start looking at how to accept these cryptocurrencies? IRX 2019 Headline Sponsor CoinPayments certainly thinks so.
CoinPayments, a digital currency payment solution allowing merchants to accept Bitcoin and more than 750 altcoins in their store through easy to use plugins, APIs and POS interfaces, is not only putting its name to the show, but is also running a Crypto Pavilion, in conjunction with Lode and presenting in the conference, with the aim of helping show retailers why and how to start to accept cryptocurrency payments.
While cryptocurrencies are still a bit of a niche interest and often associated with geeks and the dark web, they are increasingly becoming something that some shoppers want to use to pay for things online.
“Every online retailer knows that the more payment options on the offer, the more likely people are to buy,” says Sean Mackay, operations lead at CoinPayments. “That is an important reason for retailers to think about adding cryptocurrencies to their sites. But there are many others.”
According to Mackay, while cryptocurrencies are a minority interest right now, they do offer extremely advantageous fees, better security for users and speed when compared to more traditional payment methods.
“Traditional banking involves a trusted third-party such as a bank or card company handle the payment between the customer and the merchant… for a fee. This is usually in the 0.5% to up to 5% depending on the third-party and the deal the merchant has,” says Mackay.
“Conversely,” he continues, “cryptocurrencies tend to change hands for fees in the 0.006% range, partly because that is how they were set up and because there are no third parties trying to make money from handling the transactions.”
In addition, points out Mackay, the removal of third parties from the settlement chain and the attendant reduction in settlement fees means that payments can move much more quickly from one account to another, thanks to the blockchain and the eliminated trusted third-parties.
Cryptocurrencies are also much more secure. They work by wallets talking to each other using public and private keys. This mean that no personal information – names, bank details, address or anything – ever changes hands, so payee and payer are anonymous to each other.
“This means that no data changes hands and no data is stored, removing the risk that most businesses face these days of being hacked and their customer data being made public, with costly and reputational damage effects,” says Mackay.
However, even Mackay accepts that there are challenges. “Cryptocurrencies, as anyone following the news will know, are volatile. Unlike Fiat currencies, cryptocurrencies have seen wild fluctuations in value, sometimes changing value (in either direction!) by up to 50% in less than 24 hours.”
One way around this, as visitors to IRX2019 will learn, is to settle every 8 hours or so, so that you can smooth out the rate. In fact, the more often a merchant settles, the less likely they are to be victim of volatility.
Cryptocurrencies also suffer from an image problem. Many people don’t know what cryptocurrencies are, don’t know what blockchain is and, if they have heard of anything, they have heard of Bitcoin and associate it with the dark web, hackers and cyber-criminals.
However, this isn’t necessarily true: in fact they are no more likely to be used for ‘dark things’ than ‘real’ money – in fact, as analysis in the US points out, 80% of US dollar bills are one hundreds and most consumers don’t find many $100 bills in their wallets – so where are they being used?
To find out more and register for a free ticket visit InternetRetailingExpo.com