Although still considered a new industry, cryptocurrencies are poised to become the future of digital payments. Boasting multiple advantages such as protecting businesses against chargebacks, empowering access to new segments of customers and enabling truly global, borderless and instantaneous payments, it’s difficult to refute cryptocurrency adoption. However, naturally businesses now have a lot of questions about cryptocurrency. As a business, should we accept cryptocurrency? If so, how would it work? What are the benefits? Is it commercially feasible to accept such a volatile asset as payment?
To help answer these questions, Dilyana Gramadarova, Head of Strategic Partnerships at We Are Pentagon Group and host of RWB Digital Series, had a discussion with the CEO of Utrust, Sanja Kon. Utrust is a seamless integration which allows businesses to accept payments and issue invoices using digital currencies such as Bitcoin, Ethereum, etc.
Together, Sanja touched on several important aspects to consider when it comes to adopting cryptocurrency for your business. What does a world involving cryptocurrency as the future of digital payments look like? What are the key benefits for merchants in accepting crypto payments? What is the best way to go about implementation of crypto as a payment in terms of who to work with, while still prioritising security? All of this – and more – was discussed in this exclusive Retail Without Borders webinar.
Sanja’s Vision: Cryptocurrency as the Future of Digital Payments
To begin with, Sanja shared her vision for cryptocurrencies as the future of digital payments: “The role of cryptocurrencies is not only in payments, but also the whole digital financial system.” According to Sanja, this is a very important distinction to make, because payments are only one aspect of our financial system – there are multiple other necessities in the market (such as lending and borrowing). According to Sanja, today there are more than 2 billion people in the world who do not have access to the traditional financial system, due to its complexity. Therefore, with cryptocurrencies, everyone who has an internet connection and a device (which is the majority of the world’s population) now has the ability to pay, be paid and participate in the global economy. In addition, Sanja believes that not only cryptocurrencies, but also the entire decentralised finance ecosystem will “play a much higher role”, as “most people will not want to be dependent on a bank or a central entity.” The reason for this is increasingly relevant today; banks lend our money to other people and earn higher interest, but give back almost zero interest to us as customers. So while Sanja is not saying that banks or cash will disappear from one day to another, she does believe that cryptocurrencies will play an increasingly larger role as time goes on.
In addition, Sanja draws attention to the fact that today, the current market cap of crypto is about $2 trillion. This is only half of 1% of the total global wealth, so we can only imagine how crypto will shape the future. Today, there are only around 100 million (or slightly more) users of crypto – defined as those who either use or hold cryptocurrencies. Sanja’s prediction is that there will be a “much higher role that crypto can play, not only for payments, but also in the whole decentralised finance ecosystem”.
Key Benefits to Merchants of Accepting Cryptocurrency Payments
As we know, we are seeing increasing levels of adoption of cryptocurrency by users, and have acknowledged that it will likely play a much larger role in the future of the financial ecosystem. But what are the benefits to you – as an online merchant – of accepting cryptocurrency payments right now? According to Sanja, there are several benefits, and especially two of those make a real difference on the payment strategy of businesses.
The first benefit is a drastic reduction in payment processing fees. This is due to using blockchain, which essentially removes any intermediaries in the payment chain. When you pay for something with your credit card, for example, the process appears very easy – you just swipe your card and pay and your money goes to the merchant. But in reality, there are “many intermediaries in that chain and each one of them will take a fee for the service they offer”. Therefore, you can end up paying between 9%-10% in payment processing fees (especially if it’s an international payment). So the first real advantage is the reduction of those fees – in particular Utrust charges a 1% flat fee, which as you can see, is a lot lower than what you would expect to pay otherwise.
The second important benefit of accepting cryptocurrency payments is the elimination of chargebacks. By not relying on a credit card infrastructure, those costs are “completely removed”. Today, credit card fraud is increasing by double digits year on year – and there are a lot of fraudulent buyers not recognising payments or using stolen credit cards. With blockchain payments, this cannot happen, because there is no credit card infrastructure to rely on in the first place. Overall, there are multiple benefits to accepting cryptocurrency payments, two of the main ones being a reduction in payment processing fees, as well as eliminating the possibility for fraud.
Sanja’s Advice: Security and Working with Providers
So far, we have gained a valuable insight into the world of crypto: its importance, the future of the landscape and the benefits of accepting cryptocurrency as a payment method. But how would a merchant go about implementing this into their business? According to Sanja, “one thing I would avoid is trying to accept crypto payments without the help of a provider.” It has been seen in the market that merchants want to learn more about crypto, so they sometimes attempt to configure wallets independently, but this requires a lot of technical skills. Therefore, it is recommended that you partner with a trusted provider to assist with this process. Not to mention, if you also want to do conversion, you would have to partner with different providers to convert crypto into a stable fiat currency.
Sanja recommends that whatever you decide to do, you should “always work with a licensed provider.” Although there are always many unlicensed providers out there, Sanja strongly recommends avoiding working with those, because you should prioritise working with a company that has strong AML (anti-money laundering) and KYC (know your customer) policies in place. With Utrust for example, they are a regulated institution, so are required by law to have comprehensive AML and KYC policies in place. And as Sanja points out, “we are focused on the custody and the transfer of money in order to avoid any money laundering risk associated with cryptocurrency payments.” So of everything that has been discussed, this may be the most important piece of advice; security is key, so it’s absolutely crucial to work with a regulated provider that you can trust.
Overall, this exclusive webinar has provided an immensely valuable insight into the world of crypto and accepting cryptocurrency as a payment method. We’ve seen predictions about crypto as the future of digital payments, the benefits of adopting it as an online merchant and the importance of working with trusted, licensed providers for the implementation. The landscape is constantly changing; so while that is incredibly interesting on the one hand, you also have to be agile as a business and constantly be evolving. As Sanja mentions, for example, they now offer the possibility for merchants to settle in ‘stable’ cryptocurrencies, which are less volatile than the likes of Ethereum or Bitcoin. So increasingly, there are more and more flexible possibilities emerging, and these may be able to offer you more peace of mind as a merchant when it comes to the risks associated with volatility.
Access the Exclusive Utrust’s Offer and Sign up to the RWB Newsletter
Utrust has created an exclusive offer for those who registered for this session of the RWB Digital Series:
- 3 months zero fee for marketplaces, with a marketing support plan (subject to qualification via Utrust)
- 1 month zero fee for merchants (subject to qualification via Utrust)
Email firstname.lastname@example.org if you wish to access this offer! Also, If you enjoyed this article and would like to be notified of future online events, be sure to sign up to the Retail Without Borders newsletter. We’ll deliver the latest marketplace news and insights, upcoming industry events, ecommerce resources and more, directly to your inbox. If you’re in the ecommerce industry, this isn’t something you want to miss!