Is It Time for Your eCommerce to Accept Cryptocurrency?
Cryptocurrency as it is
Cryptocurrency is hot right now. To realize its potential we need to clearly understand what cryptocurrency is and how it works. According to Wikipedia, “cryptocurrency is a digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets”. As you perhaps already know, one of the first and most popular cryptocurrency is Bitcoin, which cost only 0,25$ in 2011 and since then its price has rocketed to 20,000$, although now it is highly volatile. Bitcoin was followed by many other currencies, such as Litecoin, Ethereum, Ripple, and others, often called altcoins.
Cryptocurrency is believed to be a bright future of online payments, so, many retailers start to incorporate it into their eСommerce businesses. As of 2018, there are thousands of online shops that accept bitcoin. Thinking of adding cryptocurrency to your eСommerce payment options? Let’s take a look at its pros and cons.
The benefits of digital currency
High security against fraud
One of the greatest benefits is that cryptocurrency cannot be counterfeited as it is fully digital and every transaction is secured by creating cryptographic code. There is no need to share your identity or location or the details of the transactions made between you and the beneficiary. No information required to share with the government and the bank regarding the deal. It is truly decentralized. Also, payments cannot be reversed arbitrarily by the sender, as with credit card charge-backs.
Clients can be sure that no one can steal their personal information from merchants. It is next to impossible for any person other than the owner of the wallet to make any payment from the wallet.
When accepting or sending Bitcoins and other altcoins, there are no direct fees. However, the fees apply for converting cryptocurrency into national currencies.
As cryptocurrency is not controlled by any country or central bank, there no boundary limits concerning transactions. The payments can easily be sent from user to user between countries and continents, all is needed is internet access. Transactions are performed immediately as there is no physical financial institution involved.
What about drawbacks?
Lack of awareness and stability
As cryptocurrency emerged relatively recently, many people simply don’t fully realize the concept and the technology behind it. Also, some experts are warning that it may be a kind of financial pyramid. One of them is Howard Marks, the billionaire investor who predicted the dot-com bubble crisis. He believes that “digital currencies are nothing but an unfounded fad (or perhaps even a pyramid scheme), based on a willingness to ascribe value to something that has little or none beyond what people will pay for it”, according to CNBC.
Loss of wallets
Bitcoins are kept in digital wallets on electronic devices. In case a computer or a smartphone is lost or stolen, you should remember the password to the wallet, otherwise, it is impossible to access the coins, even with legal help.
No way to return wrong payment
Once a transaction is made, there is no way to return money back. If the money was transferred to a wrong acсount, all you can do is to (kindly) ask the person for a refund.
Obviously, we’re still early in the days of crypto eСommerce. For early-adopters, it’s a great time to start accepting payments in cryptocurrency before their competitors do. However, beware of risks and carefully analyze its potential strengths.
As a conscious entrepreneur, you must be constantly looking for the ways to effectively improve your product. API2Cart is a service that can help you avoid the challenges related to the process of integration. It provides a unified API that works for 30+ shopping carts including Magento, Shopify, BigCommerce, WooCommerce, X-Cart, Ubercart, and others. In case you have any particular questions, do not hesitate to contact us.