Since the invention of the first cryptocurrency (Bitcoin)in 2019, everybody has been talking about it. Cryptocurrency might be new, but it has had a significant impact on today’s market. Blockchain is the technology behind cryptocurrency, and a few people have taken their time to understand it. Currently, it is possible to use cryptocurrency to pay for products online. Therefore, the question you should ask yourself is, what impact will cryptocurrency have on the eCommerce industry?
Cryptocurrency positive promises
Cryptocurrency is a digital currency that is independent of banks, and none of the governments in the world can mint it. Its encryption technology ensures that any digital transaction goes through a verification process done by a decentralized system and the owner of the coins in question. Since cryptocurrency has become extremely popular, it is also promising to e-commerce brands. Some of the promises and predictions to the e-Commerce sector include:
According to Traders Thailand, in an eCommerce platform, once the transaction fees are high for brands, their profit margins reduce. As a result, the clients end up paying more for the goods. If brands opt to process their payments using Stripe or Square, they pay 3-5% per transaction. On the other hand, working with cryptocurrencies might be fee-less or 1%. With such margins, brands will end up scoring more profit.
Some clients out there do not like using credit cards or banks while transacting online for different reasons. Therefore, providing cryptocurrency payments for your products will enhance your reach. As cryptocurrency’s popularity grows, your client base will also increase.
Minimum fraud cases
If you run an eCommerce business, you already know about chargebacks and fraudulent returns. However, cryptocurrency has adopted technology that can finish off fraudulent charges permanently.
Every time there is a new technology in e-Commerce, it is always exciting, and most people want to board. However, cryptocurrency has its downside, and the risks involved might have severe repercussions to your business.
Consumers do not understand it fully.
Before getting into the cryptocurrency business, it is advisable to carry out intensive research and understand all the ins and outs. Unfortunately, most people stay away from it because they think you have to buy a whole Bitcoin for around $60,000. However, the current prices in the market for buying the coins are pushing people out.
When it comes to Bitcoin prices, cryptocurrency is highly unpredictable. Since some consumers feel like they are gambling with their money, they opt-out; at the moment, bitcoin prices high; the problem is that nobody knows how long the situation will be like that. You might invest more, and then the prices drop, or you might fail to invest and lose on the profits.
Lack of consumer protection
If there is a fraudulent incident between an e-Commerce brand, a consumer, the latter is the only one who loses. Therefore, the brands need to work out a solution that will favor the consumers in such situations.
While you look into the future, you need to weigh the advantages and disadvantages of cryptocurrency. Since it is a new technology, so many advancements are in progress. It is always important to stay alert so that you do not get left behind