With the rise of online payment methods like Apple Pay, and other methods of crypto payments, who carries cash anymore?
That’s our current reality. We are truly shifting into a cashless community! When did this start to become the case?
After the NFT and crypto revolution, consumers started questioning traditional centralized payment methods, and more businesses started accepting cryptocurrencies.
Let’s dive in!
Disadvantages of Traditional Banking Payment Methods
- You need to have a bank account in order to make a payment!
- Centralized entities (Banks) have access to your private and sensitive data!
- Credit and debit cards do not have an individual-to-individual transaction option!
- High transaction fees!
- Slower processing time of payments!
- Doesn’t support micro-transactions!
Why Use Cryptocurrency Payments?
- Low Transaction Fees (Almost 0%).
- Faster than traditional payment methods since it’s automated by smart contracts.
- Reach a wider spectrum of customers via cross-border payments.
- Transparency of transactions.
The Downside of Crypto Payments
Volatility
Cryptocurrencies have a very volatile nature. And this major issue gives rise to mad price fluctuations.
Environmental Impact of Crypto Payments
Blockchain mining activities consume very high energy which can be a cause for environmental concern in the long run.
Irreversibility
Cryptocurrency transactions are irreversible as they’re processed almost instantaneously. Unlike traditional banking where you can cancel the payment by contacting a CS agent.
Funding Illegal Activity
The almost unregulated nature of the blockchain and crypto environment might pave the way for illegal funding for scrupulous behavior.
What if we don’t use crypto payments in the retail sector?
You have no choice but to accept crypto payments in order to efficiently compete in the market! Let me explain where this comes from!
If you’re competing with Amazon or Walmart to sell a product, it’s gonna be extremely tough for you considering their EDLP or ‘Everyday low prices strategy’.
Basically, companies like VISA, Mastercard, or Amex charge a lot of fees (2 to 5% and upwards) in exchange for their payment services. And this is coupled with the fact that profit margins are razor-thin in the retail industry.
For instance, if your profit margins are nearly in single digits, you absolutely can’t compete in the race for market dominance. Ultimately, this pushes a need for a substitute that won’t in the long run lead to bankruptcy.
And this is where crypto payments with nearly 0% fees come into play! In the long run, if you want to sell a product, accepting crypto is your best bet to play in the big leagues against retail giants. Stay 10 steps ahead!
The Takeaway
We can’t deny the impact of Web3 on our day-to-day lives. Not to mention that many major companies are currently accepting crypto payments namely PayPal, AT&T, Starbucks, and Tesla.
However, other companies that used to accept Bitcoin payments but stopped due to spiking fees include Microsoft, Dell, and many others. Why? Because of the lack of technical capability. Basically, if the blockchain scalability problem is solved, vendors are ready for crypto payments. Check out the blockchain trilemma for more on that!
You can probably make the connection between the promotion of crypto and the intended audience of a certain brand or company. Basically, whenever you are targeting fresh, young, and mostly tech-savvy individuals, you can count on crypto being a go-to!
On the other hand, if your audience consists mainly of millennials, opting for crypto payments won’t serve your purpose kindly. So, make sure to study your market and know your crowd!
As always, stay tuned for more!