How Accepting Cryptocurrency Can Increase Your Sales
As per research, merchants accepting payment in cryptocurrencies gained up to 40% new customers. The same study also found that customers’ spending with cryptocurrency was twice as compared to those paying with credit cards. It is captivating enough to add a cryptocurrency payment option to your business today; however, you must be having many concerns that need to be cleared up. But, because we got your back, you need not worry.
In this article, we will explain:
- A brief history of cryptocurrencies
- How accepting cryptocurrencies can increase your sales?
- What other benefits are associated with accepting cryptocurrencies?
- Which cryptocurrencies should be accepted?
- How to avoid its high volatility?
- What is the future of cryptocurrencies?
Before diving right into increasing sales with cryptocurrencies, it is crucial to know cryptocurrency’s prologue.
1. A Brief History Of Cryptocurrencies
A yet-to-be-identified mysterious man, Satoshi Nakamoto, is supposedly the pioneer of cryptocurrency. He brought a workable idea of decentralized currency for the people annoyed by central authorities managing their digital currency. He brought his concept to life in the form of the first-ever cryptocurrency, Bitcoin.
The quick adoption of Bitcoin by the people depicted the intensity of their grievance with traditional currencies. Hence, it was a clear opportunity for many others to explore this avenue. In the light of such circumstances, some brought more workable ideas than Bitcoin.
One such idea was proposed by Vitalik Buterin, a young Russian-Canadian programmer who was aged just 21 years at that time. He introduced the Ethereum network to decentralise currency and many other applications that involve a third party. To illustrate, Ethereum can potentially decentralize cab services; most are currently centralized, such as Uber.
With fascinating functionalities, Bitcoin has maintained the top spot in terms of market capitalization, followed by the Ethereum Network. The advancement, however, has never stopped. The two hegemonic cryptocurrencies aren’t flawless, so many brilliant minds continuously come up with new ideas to rectify their flaws.
One such rectification to Ethereum’s flaws, Polygon offers better transaction throughput, thus making the transactions cheaper and faster than Ethereum. Polygon’s MATIC is the network’s coin, or in other words, the network’s fuel. Since cryptocurrency is still a fledgling avenue, more advancements similar to Polygon are yet to come.
2. How Accepting Cryptocurrencies Can Increase Your Sales?
As of August 2021, 18.77 million bitcoin is circulating globally, equal to $1,250,254,684,000, a colossal figure that is not even readable at first sight. With this hefty amount in people’s pockets, you are missing out on a massive opportunity if you don’t provide them with a way to pay it out.
One of the answers to the question “How accepting cryptocurrency can increase your sales?” is disguised in a reason for its existence.
Before cryptocurrencies existed, credit or debit cards were the only feasible options to make contactless payments. The problem with these cards, however, was and has remained the breach of personal data. As we swipe our credit cards to make payments, the vendor knows our first and last names.
The vendor can also extract information from us to home-deliver a service or product, such as zip code or address. Combining it with the data they acquired with the swipe of our credit/debit card, they can indulge more in our privacy with the readily available data appending services. With data appending, they can acquire our personal information such as employment status, marital status, homeowner status, children, and Interests.
Much to privacy-conscious people’s dismay, it is only one possibility out of many options that vendors can exploit their data from credit/debit cards. Just to highlight, who is not privacy-conscious in today’s era? Probably none.
Even though you can guarantee not to breach the customer’s privacy, you cannot bring them back with credit or debit cards because the one once bitten by a snake will fear even a noose.
Now let’s come back to the cryptocurrencies. Cryptocurrency is the only contactless payment solution that can resolve this problem at the moment. Realizing its importance, 2,352 businesses have already started accepting Bitcoin, and they have derived only benefits from it.
Many of the people who have minimized their spendings to avoid privacy breaches can be lured back with the help of cryptocurrencies. Because transactions with a cryptocurrency happen pseudonymously, the customer’s privacy is not being compromised in any way as it was being done with a credit or debit card.
Hence, a significant chunk of the population, composed of people who are paranoid of their data being compromised when they shop, can cause a spike in your sales if you accept cryptocurrencies.
3. What Other Benefits Are Associated With Accepting Cryptocurrencies?
One of the most appealing benefits of accepting cryptocurrencies can be none other than preventing chargeback fraud. Unfortunately, chargeback, forceful extraction of funds from a merchant’s account by a credit card provider, is a prevalent problem nowadays.
Chargebacks are designed to protect the customers, but they are often highly damaging to businesses. Not only can hackers initiate the chargeback without the actual card holder’s knowledge, but it can also be performed by actual card owners when they are dissatisfied with a product or service.
In either case, it is damaging to a merchant. The damage gets intense because the chargebacks usually aren’t processed instantly. They may take weeks or even months, and administrative costs are bombarded upon the merchant during this period.
The problem of chargebacks is getting severe with every passing year; it is increasing at a whopping 20% each year. Cryptocurrencies, however, can put a bridle on this problem.
Besides increasing sales, you can also improve your net profit by eliminating chargeback frauds.
4. Which Cryptocurrencies Should Be Accepted?
With nearly over 6000 different cryptocurrencies in the market as of 2021, it may be a challenging selection to approve a few for acceptance. While you may not want to lose even a single sale happening via any of the cryptocurrencies, managing the acceptance of numerous cryptocurrencies simultaneously can be daunting.
Hence, it is better to offer a few options that dominate the crypto market in terms of market capitalization, such as Bitcoin and Ethereum. Or, if you can manage and want to extend the possibilities, you should go no farther than Ripple, Litecoin, and EOS.
5. How To Avoid Its High Volatility?
Volatility is one of the major concerns people have regarding cryptocurrencies. When it comes to investments, high volatility is considered directly proportional to high risk. Also, higher the risk, higher the profit.
Hence, it depends on a person’s personality to choose. While some tend to be risk-averse, some happily welcome the risk as they focus on the higher return at the end.
In a business, it depends on its nature. If it’s a sole proprietorship, the owner has complete authority to choose high risk or low risk. If it is a partnership business, the power is divided among the number of partners and a collective decision is made by incorporating everyone’s thoughts.
In a company, however, taking a lower risk is preferred since a wrong decision’s impact will instantly trickle down to thousands of the company’s shareholders.
Suppose you are a sole proprietor or a partner but a risk-averse. In that case, you can avoid the high volatility of cryptocurrency by converting it into fiat as soon as you receive it from your customer. On the other hand, if you are a risk-taker, you can keep it and wait until it skyrockets, or it may also dump and hit the lowest.
6. What Is The Future Of Cryptocurrencies?
As the advancements in cryptocurrencies are happening continuously, we are witnessing a better form of it every day. Cryptocurrencies, in their initial days, used to be highly energy-consuming. Nowadays, however, this issue is also being addressed.
Ethereum, the second-largest cryptocurrency in terms of market capitalization, aims to redesign the mining process and cut off energy consumption by up to 99.95%.
The benefits offered by cryptocurrencies, as mentioned earlier, are a dire need of people. Not only that the cryptocurrencies benefit consumers by saving their privacy, but they also help merchants against chargebacks. These two benefits are just two drops from the ocean of benefits that are yet to be explored.
As the fledgling cryptocurrencies will advance towards maturity, we may witness many of our daily life problems being solved by them.
From Q3 2019 to Q2 2021, the global adoption of cryptocurrencies has also skyrocketed by 2300%. This research hints at a safer future for cryptocurrencies if their advancements continue with the same zeal.
To sum up, empirical data available presently suggest an increase in sales with the acceptance of cryptocurrency. How is it happening? We have mentioned the possible reasons to help you make an informed decision for your business.
However, the data is limited. In the upcoming years, we may see more businesses accepting cryptocurrency, so we will get a better look at the correlation between accepting cryptocurrency and an increase in sales. Till then, we wish you an increase in your sales.