So far, whenever we made online purchases, how did we pay? Obviously, by net banking, credit/debit cards, cash on delivery etc. And now with the evolution of Bitcoin and cryptocurrencies, do you think that using these for e-commerce payments will be more beneficial? Will there be any cons that will do away with the pros?
Since cryptocurrencies are yet not implemented for online e-commerce payments on a full scale hence it is little difficult to speculate what it can and can’t do. In a recently held e-commerce conference in Cluj-Napoca, TeCOMM, among the other matters of debate, was the matter of payments in the e-commerce. The debate was focused on issues regarding consumers’ confidence over the current payment methods, their flaws, frauds and the extent to which these were affecting.
Image source: chargeback
It’s hardly surprising that Blockchain application development technology through Bitcoin or the other cryptocurrencies can impact the e-commerce. A few months back, one of the big cryptocurrency payment providers, CoinPayments declared an alliance with Shopify, to assist payments of greater than 300 cryptocurrency payments for the online purchases. Here’s a list of the notable reasons behind cryptocurrency payments spelling the future of e-commerce.
A reduced transaction charge:
Both retailers and consumers can take the best advantage from cryptocurrency transactions because the charge levied on a transaction will reduce. For instance, the supreme Bitcoin payment contributor, BitPay, charges a mere 1 percent settlement charge for the bitcoin payments. Contrary to this, the credit card companies charge greater than 3 percent for the processing. These fees can further add up. While there are other blockchains that ignore transaction fees for the usual operation, without compromising on the security of the e-commerce platform’s network.
An augmented transaction speed:
At times, it becomes irritating when a message flashes while buying your most desired product online saying that some problem with the platform or the bank has occurred and hence the transaction could not be completed. With cryptocurrency, the transaction speed will increase due to the removal of intermediaries and the distributed nature. There won’t be only one server but more hence the load will be reduced, and processing will be much faster.
The greatest benefit linked to doing cryptocurrency (online) payments is that there’s no involvement of any mediator or third-party. The technology of Bitcoin is planned in such a way that the payment from the sender party directly goes to the receiving party. Today, the payments go through the e-commerce platform and the banks to the seller but with cryptocurrency, the payment will be received instantaneously and safely without any intervention from the e-commerce platform or the bank or any financial institution.
One of the big concerns of online payments that consumers have is the fear of fraud which results in money theft and losses. But with cryptocurrency and its feature of smart contracts such frauds can be averted. Crypto payments are irreversible and safe, because all the transactions that happen, get recorded on the blockchain ledger. While the funds get locked in a public key encrypted system. Along with this, the way the payment is done in the decentralized blockchain, it provides a benchmark on encryption which is a chance in million to break.
Motivation with rewards:
When we make online e-commerce transactions, we hardly get any rewards or the ones that are provided by the e-commerce platform are off the mark because they ask us to shop more for a specific ‘big’ amount; burning a hole in the pocket. But in contrast to this, the e-commerce platforms that trade in cryptocurrencies are offering reward programs. Like some platforms provide its consumers with tokens to save on transaction charge, earn additional tokens, reimbursements etc. They also provide rewards by creating new blocks with coins in it.
International e-commerce payments:
When we purchase online from a different country, then a heavy charge is applied and even some verifications are done before the bank processes the payment. Or you have to keep a credit card of that country to ease the payment but that again is an exhausting process. With the cryptocurrency payments, it will be eased out because the verifications will be done beforehand and only then the transaction will happen. Also, due to its peer-to-peer nature, the money will directly and immediately be transferred to the seller.
E-commerce is one of the fastest growing industries and it can grow more by making online shopping easy as pie; for e-commerce businesses to attract more consumers. Cryptocurrencies can turn this goal into reality because they have no flaws and barriers. It is true that this will need time to make more and more people use this technology for online payments.
Some of the Subway joints are using Bitcoin in the form of payments, Newegg is another e-commerce platform that a diverse variety of products and is accepting Bitcoin for payments. I think we are not very far from using a generalized cryptocurrency payment system.