Leveraging Cryptocurrencies Can Transform Businesses Forever
Lately, the development of blockchain technology has provided organisations with innovative types of digital assets like cryptocurrencies and stablecoins. They put the foundation for developing new payment rails that can move value from one country to another in real-time and at low costs.
Cryptocurrencies have gained mainstream acceptance across the globe over the last few years because people are looking for innovative ways to diversify their savings portfolio, save on transaction fees, and protect their financials against inflation. Well-known brands such as Starbucks, PayPal, Microsoft, AT&T, AMC Theatres, and Whole Foods are some of the names that accept crypto payments. The cryptocurrency market is expected to reach $2.2 billion by 2026, and more venues around the world to integrate cryptocurrency payments into their services.
Digital coin payments allow organisations to develop new and innovative offerings for their clients. They can create mobile apps that enable buyers to use digital coins to purchase products, services, or platforms that automate payments.
The popularity of crypto assets is spurred by their ability to lower fees and enable free international transactions. The blockchain technology behind cryptocurrencies facilitates more secure payments, which would benefit a business looking for ways to maintain payment processing costs at a minimum. More organisations adopting cryptocurrency payments will instil greater transparency into transactions and boost security. This would help especially international businesses that need a form of payment that allows them to cut down transaction fees for their clients.
How cryptocurrency integration improves business practices
Organisations and individuals have a growing interest in crypto assets as they search for more affordable, faster, and easier payment processing solutions. Here is how cryptocurrency payments benefit businesses.
No need for intermediary
The biggest benefit companies get when using crypto payments is they save money on processing fees. Traditional financial institutions like banks or payment gateways ask for a percentage fee for each transaction. Even if they usually ask a fee from 1% to 4% to process a transaction, which might not seem much, when the costs add up, they can make a small business lose its competitive edge or experience cash flow issues.
Small businesses usually pay higher transaction fees than bigger companies, and they would benefit from integrating cryptocurrency payment and using blockchain technology. Digital coins promise improved flexibility for companies by facilitating access to international markets without being concerned about exchange fees and rates. When a company relies on blockchain technology, it doesn’t work with banks because it transacts business directly with sellers and buyers. Therefore, merchants can offer discounts on products and services to attract more clients. Cryptocurrency payments make transactions more efficient because neither the business nor the client has to pay purchase fees.
The use of digital currencies enables companies to gain access to new clients who prefer to pay with cryptocurrencies. Research shows that 40% of the buyers that pay with digital coins are new to the seller.
The business benefits from improved freedom over its finances
Sometimes companies cannot take certain financial actions because they have limited resources or other external pressures that restrict their performance. An organisation might have several ideas for expanding its operations and boosting efficiency, but it might lack the necessary funds to pursue its goals. Sometimes the only solution is to take debt to fund their operations.
Blockchain technology offers companies direct access to their finances without having to work with a third party; therefore, it has more freedom on how to use its funds.
Enhanced identity protection
When someone completes a financial transaction with a bank or payment gateway, their personal details are sent through unsecured channels and stored in databases vulnerable to cybercriminals. Cybercriminals have great skills these days and can hack even the artificial intelligence behind a financial infrastructure. If the buyer’s credit card number is stolen during a data breach, a cybercriminal can use it and compromise their financials.
When organisations rely on a blockchain-based identity system, the buyers can hold their information in an encrypted place only the user can control it. Blockchain technology uses advanced cryptography to protect sensitive information and buyers’ identities.
Which cryptocurrencies are most used for business transactions?
Everyone knows that Bitcoin is the most popular cryptocurrency among traders, but is it the most used for business transactions? Bitcoin promised to start a payment revolution when it was first launched, but it proved that it’s challenging to deliver its promise as its network is too slow and volatile for it. Over the last few years, we witnessed a rise in popularity of other digital coins that are better payment cryptocurrencies.
Ethereum is the second-most popular cryptocurrency worldwide for a reason, it’s the first digital coin to use smart contracts. Many of the businesses that integrated cryptocurrency payment into their operations prefer Ethereum because other applications and cryptocurrencies widely use its network. Ethereum price is another factor that convinces organisations to adopt ETH payment.
Zcash is a digital currency that focuses on privacy, and therefore it offers an essential benefit to businesses looking for ways to enhance their clients’ privacy. Several advertisers and third-party payment providers adopted it as an accepted payment method.
Dash gained great popularity as a cash alternative in Venezuela when the country experienced an economic crisis. Dash has several ATMs worldwide, and its app works on multiple devices, making it easier for customers to use digital currency for online transactions.
Litecoin has four times more available coins than Bitcoin and completes financial transactions four times faster. It’s no surprise that many online merchants prefer it. Cryptocurrency enthusiasts probably know that its open-source software was the basis for the meme-coin Dogecoin.
Monero is another digital coin that prioritises privacy and offers a secure payment system. Because it disguises the user’s wallet address, it provides online users with anonymity.
Ripple is one of the cryptocurrencies that rank in the top 10 digital coins. However, over the last months, its evolution has been hampered by a SEC lawsuit that discusses if it should have been sold as a security.
The public sector can use cryptocurrencies to bring back competition to payments.