Crypto-currency is any form of currency that is virtual or exists digitally. It secures online transactions using cryptography. Unlike traditional banking systems, crypto doesn’t have a central regulating authority such as a bank. Instead, it is a decentralized system that issues new currency units and records transactions.
Why use crypto?
The underlying technology makes transactions secure, scalable, and verifiable, as they are recorded in a digital public ledger, making them more transparent. Unlike traditional transaction channels, cryptocurrencies employ layers of encryption which makes them incorruptible.
This encryption only allows the intended receiver to view and receive digital currency from the sender, making it easy and seamless to make anonymous purchases using encrypted wallet addresses.
It’s safe and Seamless.
Customers buying from eCommerce sites find it convenient and safe to use crypto, as they won’t compromise their personal information. Likewise, the eCommerce company can do business with its customers without worrying about privacy regulations.
Unlike traditional banking systems, Crypto-currencies give eCommerce businesses instant access to funds. Crypto transactions help to streamline your business cash flow since they are direct and super-fast.
It has Lower transaction fees.
By using digital currencies, you bypass the central intermediary (banks). And this dramatically reduces your transaction fees. Crypto use also protects the merchants from any fraudulent chargebacks. Since the digital currency is decentralized, transactions are final, making it impossible for third parties to reverse charges.
Most countries in the world are rapidly accepting digital cash. And you can use crypto anywhere in the world without having to adapt to the currencies of that region. As a result, this has broadened the market reach of merchants to other potential customers across the world.
Top Cryptocurrencies you can integrate into eCommerce
• Bitcoin (BTC)
Created in 2009, Bitcoin is the first cryptocurrency. BTC is also the most popular crypto. And just like other cryptocurrencies, it runs on a blockchain, that is, a ledger that logs transactions across a network of multiple computers (decentralized system). Bitcoin is relatively safe and secure from fraudsters.
• Ethereum (ETH)
Ethereum is both a blockchain platform and a cryptocurrency, making it a favorite of developers due to its potential applications. Among these is the “Smart Contracts,” which execute automatically once transaction conditions meet.
• Tether (USDT)
Tether is stable compared to some other digital currencies as it has the backing of fiat currencies like the Euro and USD. And its value remains almost equal to one of these denominations. Investors prefer this coin as it’s relatively less volatile and more stable than some crypto coins.
• Binance Coin (BNB)
While Binance was initially started as a currency to facilitate trades on its exchange platform, you can now use it to trade and process online payments. You can also exchange Binance coins for another crypto such as Bitcoin or Ethereum.
• U.S. Dollar Coin (USDC)
USDC is a stable coin backed by the U.S. Dollar; it runs on Ethereum. And just like Tether, USDC aims to achieve a ratio of 1 USDC to 1 USD. You can use USDC for global transactions.
XRP facilitates the exchange of different currencies online. These include fiat currencies like the USD and Euro. XRP also supports cryptocurrencies such as Bitcoin and Ethereum, among others.
How to accept crypto in your eCommerce store
You can accept digital currencies in your online store through 3rd party payment processors or personal crypto wallets.
• Crypto Wallet
A cryptocurrency wallet is an application that allows users to store and retrieve their digital assets. It’s also proof of ownership of your digital assets, and it helps to keep all your cryptocurrencies securely in one place.
The cryptocurrency exists on a blockchain and not in the wallet. And a customer can interact with the balances in a particular blockchain when purchasing in an online store. Simply put, a crypto wallet provides access to your digital assets that are in a given blockchain, such as Bitcoin.
Apart from letting the owners move coins elsewhere, the wallet software also stores addresses and allows others to see balances at any given address.
There are two types of wallets: Hardware wallets and Software Wallets.
This wallet looks similar to a USB stick, and in it is a set of private keys you will need to access your cryptocurrency on a blockchain. Since these keys are offline, they are inaccessible to digital threats, making this wallet the safest and most secure way to store and access cryptocurrencies.
This is software installed on your smartphone, personal computer, or the cloud. Similar to the hardware wallet, this software generates access keys to your crypto so you can transfer your digital currency during a transaction. However, it’s more vulnerable to digital threats like hacking or data loss.
Experts recommend users invest in different wallets for extra safety. This is especially handy when dealing with multiple types of crypto, with varying features and value. Examples of wallets include Coinbase Wallet, Trezor Model T, Ledger Nano X, Exodus, and Mycelium.
3rd Party-Payment Processors
Crypto payment getaways or third-party payment processors allow businesses to accept cryptocurrency transactions from online buyers in exchange for goods and services. They feature highly customizable tools and native dashboards that make it easy to track all online payments.
When an online buyer purchases products using crypto, this transaction goes through the payment processor at a fixed exchange rate. Finally, this payment getaway converts this currency into traditionally recognized fiat currency to save the merchant from the volatility of cryptocurrencies.
Some, however, do not automatically transfer it to fiat currency but instead allow the merchant to hold onto the digital currency within their crypto wallet.
Generally, these systems accept transactions from any country. But to qualify for inclusion in this category, a product must meet the conditions below:
– Accept and process the crypto payments
– Connect eCommerce solutions with the transaction systems
– Store the crypto-currencies securely or else convert them into fiat currencies
– Encrypt all transaction information using blockchain technology
Third-party payment processors can integrate with point-of-sale systems, e-commerce platforms, billing & accounting solutions, and shopping cart software. And they tend to offer significantly lower fees than credit card payment systems.
These getaway systems support different Cryptocurrencies, with Bitcoin being the most popular.
Here are some popular cryptocurrency payment apps which you can integrate into an eCommerce store.
• Paytomat Wallet
It’s easy to use and supports most cryptocurrencies, allowing anyone to send and receive digital currency across the globe. Some features include multi-currency support, backup, and recovery, including a 24-word backup phrase, dynamic fees, a 6-digit pin, and instant pay using a QR code.
This payment getaway has tools that enhance Bitcoin transactions. With Blockonomics, you can access utility features like creating P2P invoices and tracking wallet addresses.
This Bitcoin Wallet supports integration into iOS and Android systems. It features simple functionality and easy integration into a store’s POS. It’s a cost-effective way of transacting using Bitcoin.
Users of Prodoge can connect their digital currency wallets, PayPal, and Stripe and start sending payments, invoices, and POS checkouts. Prodoge is a handy payment getaway to help an online business thrive by enabling merchants to connect with their clients worldwide.
This multi-asset wallet is safe and secure to use. And it provides native support for a total of 1770 coins, available in 168 fiat currencies.
BitPay features a robust API, 22 eCommerce plugin solutions, seven ready-to-use libraries, and instant integration into some of the best eCommerce services.
CoinGate supports Bitcoin, Ether, Litecoin, and 50 other virtual currencies. You can withdraw at a flat rate of a 1% fee without hidden cost and access integration tools like shopping cart plugins, API, payment buttons, and web Point-of-Sale. Users also enjoy a sleek user interface using CoinGate.
Frequently Asked Questions
– Why should eCommerce businesses adopt crypto transactions?
While cryptocurrencies are different from credit card transactions, they share a similarity. They both offer convenience to customers by allowing them to pay electronically for products, which significantly boosts the business’ online sales.
– How are cryptocurrencies likely to affect eCommerce?
Digital currencies give you instant access to funds, helping streamline the business’ cash flow. They are also more secure than credit card transactions, helping reduce eCommerce fraud. And also increase the customers’ trust and make it more convenient to shop.
– What are the benefits of using crypto for merchants and buyers?
By accepting digital currencies, merchants are protected against fraudulent chargebacks, thanks to the decentralized setup of cryptocurrencies. On the other hand, customers enjoy reduced transaction rates compared to credit card charges.
– Can you use crypto on Shopify?
Yes. Shopify accepts most cryptocurrencies, including Bitcoin, Litecoin, and Ethereum, using third-party payment processors like BitPay, Coinbase Commerce, and CoinPayments.net.
In Conclusion, ecommerce and cryptocurrencies are rapidly transforming the way retailers and consumers transact business.
And while some consumers remain skeptical about crypto as a viable currency, it’s no doubt that digital currencies will impact eCommerce businesses significantly in the future, albeit positively.
As more businesses consider integrating blockchain technology and crypto use into their business models, it will be interesting to watch this space.