Digital Cash in a Digital Wallet: Cryptocurrency
With the world rapidly digitalizing at an increasing pace and money being the driving force as always, currency was bound to go digital as well. So, it did.
The phenomenon is being more readily adopted by buyers and more widely accepted by businesses each day for all the reasons that make virtual currency more preferable over traditional currency. Here are a few:
Lower Transaction Fees
Cryptocurrency does not rely on intermediary financial institutions to process payments, unlike traditional currency which depends on a centralized system. This direct B2C operation cuts out the middleman’s cost and reduces the transaction fee from up to 10% of the total transactional value to less than 1%, leaving more profit margin for businesses.
Cryptocurrency presents higher security to both consumers and businesses. For consumers, it offers transactions without requiring personal information, keeping financial activity confidential. For businesses, it provides irreversible transactions, which prevents ‘chargeback fraud’- reversal of a payment by a customer after a successful purchase.
Due to the absence of a centralized system for financial proceedings, cryptocurrency transactions are sanctioned almost instantly, unlike traditional transactions which can sometimes take weeks to be processed. This ensures that a business keeps running with a smooth flow, without any transactional hurdles or delays that may obstruct its growth.
Cryptocurrency not only holds the same monetary value all across the globe but the decentralized payment system also lifts processing restrictions and extra charges on cross-border transactions. This allows businesses to expand overseas while retaining maximum profit which would otherwise be utilized in international payment processing, also causing to lose customers to the high price they need to pay for a foreign purchase.
Offering cryptocurrency as a means of payment allows businesses to sell their products and services to customers who do not possess credit or debit cards, expanding their clientele to individuals who are otherwise not equipped to shop online. Moreover, all the aforementioned pros of making payments via cryptocurrency attract more customers to shop online, increasing sales of businesses offering this mode of payment.
With so many reasons to embrace cryptocurrency, more e-commerce platforms are offering it as a mode of payment to their customers everyday and it does not seem long before virtual currency takes over traditional currency.