The emergence of Cryptocurrency into financial technology continuously grows and evolves to become more prominent. Major cryptocurrencies such as Bitcoin and Ethereum have made their way to the financial sector, allowing users to pay for products and services found online with it.
As technology merges with our everyday lives, our financial habits and behaviors also adapt to further drive change. Let’s take a look into cryptocurrency and how it’s slowly becoming a mainstream payment method across merchants and consumers worldwide.
What are cryptocurrencies and crypto payments?
As excited as we are to dive into crypto payments and how cryptocurrencies function in the modern world, let us first tackle what they are.
Cryptocurrencies are digital or virtual currencies that are secured by encryptions. They are based on decentralized networks, allowing them to exist outside of the control of governments and central authorities. In simpler terms, these are virtual currencies you can use to convert or use to pay for products and services online.
It’s a digital asset that features highly secure, cheap, and fast money transfers and decentralized systems that are separated from central authorities. Theoretically, this leaves them immune from government interference or manipulation. It is also a product of blockchain technology.
On the other hand, crypto payments or cryptocurrency payment gateways are payment processors for cryptocurrency, similar to those used in banks. This allows you to transact digital payments and instantly receive fiat currency in exchange. Through these platforms, crypto payments are steadily being accepted by merchants worldwide.
The landscape of cryptocurrency payments
Cryptocurrency has become one of the most robust financial innovations in recent years. The COVID-19 pandemic indirectly helped the industry in stepping into the mainstream as social distancing and quarantine protocols emerged. Many were forced to develop ways to utilize technology and digital platforms.
According to CoinMarketCap, the Cryptocurrency market value is at US$1.9 trillion as of February 2022 and continues to grow as traditional banks and authorities begin to recognize and adapt cryptocurrency as part of their financial system. Although the industry renders speculation about cryptocurrency, countries have become proactive in regulating cryptocurrency as the world further dives into its digital age.
It is predicted that there are 300 million crypto users worldwide, 15-20% of which are implementing merchant payments with their cryptocurrencies. Countries such as India, USA, Nigeria, Vietnam, and UK are seen to be the heaviest users of cryptocurrency globally.
However, crypto is still predominantly used by young to mid-aged males. The crypto demographics showed 79% of its users to be males and 21% females. 58% of which are 34 years old below.
The potential of cryptocurrency as a mainstream payment method
Everyone strives to achieve accessibility, security, and convenience when it comes to managing their finances. As cryptocurrency continues to grow, consumers and merchants worldwide have been getting onboard with investing into cryptocurrency and digital coins to further ease their access to payment options online.
Cryptocurrency boasts numerous features such as:
- Better payment security. Cryptocurrencies are based across decentralized networks, the chances of security breaches such as scams, cyber attacks, counterfeiting, and double-spending is significantly lowered.
- Speedy transaction process. As it operates solely on its own and without any intermediary third-party processes, crypto transactions prove to be faster in comparison to traditional payment methods.
- Lower transaction fees. Cryptocurrencies in general charge music lower fees in comparison to other mainstream payment methods that are widely used today.
To welcome cryptocurrencies, industries and governments worldwide have been actively adapting such platforms to help improve financial systems and overall embrace the world’s shift to highly advanced technologies.
Implications of integrating cryptocurrency on merchants
It is no secret that cryptocurrency is taking the world by storm. It’s popularity is rising among consumers, partly due to its potential to provide more seamless and secure financial transactions.
According to the US Consumer Crypto Survey, over 48% of Americans have invested into cryptocurrency during the first half of 2021. In 2020, over 2,300 businesses accepted Bitcoin as a mode of payment among its consumers.
Cryptocurrency can provide your business benefits such as:
- New consumer demographics
- Integration of new technologies placing your company ahead of its competitors
- Access to new capitals and liquidation pools
- Provides options that are not available with fiat currency
- Can serve as an effective alternative or balancing assets to cash
Crypto payments opens new doors to businesses who are venturing and maximizing digital platforms as their main gateway for receiving transactions. Doing so can remove barriers and help them connect much easier with their clients whether locally or internationally.
The future of cryptocurrency
It is important to keep in mind that, despite being a popular platform among numerous users, cryptocurrency and blockchain is still early in its evolution process. The future of crypto payments as a mainstream payment method is however scaling at a promising rate. Certain sectors are considering opening and regulating financial systems to adopt and recognize cryptocurrency legally.
The rise of digital payments has provided a gateway for Cryptocurrency to establish itself as a worthwhile option providing security, speed, and accessibility. It’s increasing volume of investors and consumers provide a bright and promising future for the digital currency as it caters to the growing needs of consumers today.
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