The Most Important Reasons Why Cryptocurrency Affects Ecommerce
Government lockdowns have accelerated the shift to online shopping. According to ROI Revolution, e-commerce sales are expected to hit a record high of over $ 843 billion this year in the United States alone. Some of the factors driving the growth of e-commerce include flexible shopping hours, mobile internet penetration, data protection, and the ability to shop from home.
Recently released data from Adobe projects that e-commerce sales will reach $ 1,000 billion by 2022. Along with the deployment of techniques from a sales training program, integrating cryptocurrencies into your e-commerce business could increase your sales. Take advantage of crypto, and you lower the transaction cost and give your customers more options at the checkout.
Why is cryptocurrency important?
Cryptocurrency, in simple terms, is a digital currency the use of which is not controlled by any central authority, bank, government or state. Today, more than 5,000 different digital currencies are used in sales transactions. The most popular cryptocurrencies include:
- Binance Coin
- XRP (Ripple)
Crypto is based on blockchain technology and uses complex encryption techniques that regulate their use and generate their release. Using cryptographic proof, transactions are verified and recorded in encrypted databases called blockchains. To prevent fraud, every sale is verified using proof of work or proof of stake validation techniques.
Cryptocurrency is catching the attention of many e-commerce retailers. One of the main reasons is that it is programmed to facilitate automatic conversion to local currency. Some of the major companies accepting crypto payments include PayPal, Tesla, Microsoft, Overstock, and Starbucks.
PayPal currently allows its US customers to buy, sell, and hold crypto in their PayPal accounts. The payments giant also plans to allow its customers to use cryptocurrencies to pay at 26 million different merchants around the world.
Benefits of using cryptocurrency in e-commerce
Cryptocurrencies are not only gaining popularity as e-commerce payment options, but also make it easier for customers to buy, sell, store, and even trade trading assets. Crypto is practically everywhere and continues to gain momentum.
By training yourself on how to effectively integrate cryptocurrency payment options into your e-commerce platform, you can take your business to the next level.
Here are five key benefits of integrating cryptocurrency into e-commerce:
Faster Payments: Cryptocurrency gives you instant access to funds. Crypto transactions can help streamline your business cash flow because they are straightforward and fast.
Safer : To reduce e-commerce fraud, digital currencies use escrow services. The cryptocurrency escrow account holds the money until the sender and receiver are satisfied and have completed the escrow agreement. Once crypto sales are complete, they cannot be canceled or reversed.
More transparency: Blockchain technology programs ensure trust and transparency. Thanks to the distributed ledger system, each transaction is verified by a user. It then becomes a public record.
Eliminate the middleman: Cryptocurrency eliminates the need to deal with intermediaries in many of its processes and transactions.
Wider market: The convenience of digital currencies is appealing to customers around the world, allowing e-commerce retailers to tap into larger online marketplaces and gain more sales.
The potential pitfalls of cryptocurrency
It is also important to assess the risks, which include:
Currency volatility: Traditional currencies generally do not have strong rises or falls in value. However, cryptocurrencies tend to be volatile, which can quickly erode the value of your money if currencies go down. If the currency drops, you may not be able to restock your merchandise.
Tax matters: The IRS says, “A the taxpayer who receives virtual currency as payment for goods or services must, in computing his gross income, include the fair market value of the virtual currency, measured in US dollars, on the date the virtual currency was received. “
Since the IRS will ask you to report your cryptocurrency income and assess it using the value on the date you received the funds, keeping your records and tax calculations can get a bit more complicated. .
Regulatory challenges: Since cryptocurrencies are not strictly under any territorial regulation, potential issues can arise if you decide to move your business to international markets. For example, some countries, like China, have banned the use of cryptocurrencies.
How Cryptocurrencies Influence Ecommerce
Wondering if cryptocurrency payments work for e-commerce? Trainers who run crypto learning programs claim that e-commerce and crypto are technology-centric and complement each other well. Cryptocurrency is now part of the e-commerce selling process and is the alternative to cash and credit cards.
An e-commerce platform allows your customers to search the web for products and purchase them from the comfort of their own homes with just one click. Accepting cryptocurrencies into your online business can give your brand a competitive edge.
The bottom line
Digital currencies have the potential to break through barriers and negotiate entry into the larger e-commerce industry. With cryptocurrency, customers don’t have to use their credit cards, visit a bank, or withdraw money when paying at checkout.
Accepting crypto could be a great addition to your ecommerce business and give you new customer base. Learn how to seamlessly integrate crypto payment options on your platform for the convenience of your customers.
However, don’t forget to take the risk factors into account. Also assess the viability of using cryptocurrency based on your product or service and target demographics.