Payment apps and portals are at the moment where money and payments are at today. Not only is it the convenience, but it is also the added uses that can come from an app that is driving this new wave of adoption.
Luckily for cryptocurrency enthusiasts, there is a growing trend for these types of payment apps to embrace and enhance, their offerings with cryptocurrencies, creating a symbiotic relationship. The fact that payment apps offer cryptocurrency investing and spending opens up their market to a growing number of people, and at the same time, these apps are normalising and helping adoption of cryptocurrencies into the mainstream market.
So where does the future of payments lie? Cryptocurrencies will play a major part. More so, what will payment apps and portals look like? for in today's market, one function is not nearly enough.
The New Generation
Even in today's world, one can notice a change that has been making its final moves. Cash is slowing being phased out for more virtual forms of currency. Money can now be stored on a plastic card with its digital links to the bank and payments made with relative ease at brick and mortar vendors, as well as online.
The virtual payment portals set up through banks, and backed up with credit and debit cards, allows for much more ease of payment, and efficiency; it is something that has developed due to an increasing digital demand.
But as the digital demands of people advance, so do the payment offerings. China's WeChat is an example of a payment system that started as one thing and has moved with the times to embrace a different way of making payments.
WeChat started when friends and family wanted to send money as a gift, and this then spread to practically all forms of payments. But what makes WeChat unique, in addition to its 1 billion daily users, is that they are much more than just a payments solution, you can do practically everything in everyday life through their platform, from booking a doctors appointment to ordering a meal.
It is possible that this path will not be the repeated in other markets, but it appears that a dedicated payments solution needs to do much more than just payments. As people become more comfortable with the services then these service's popularity will increase, but to make the step so that they become the de facto payment solution, it is very likely that the service needs to be much more than payments; there has to be a use case beyond payments.
Cash has always been limited by the fact that it can only function in one instance; between parties that are present. Card payments changed that by allowing users not necessarily to be present when making payments, and of course, digitalising the whole matter. The draw of payment apps, much like the smartphones they operate off, is their multifunctionality.
A Cryptocurrency Offering
Cryptocurrencies, as still very much a misunderstood form of payment, get their foot in the door thanks to payment apps and their multifunctionality. Apps, such as Circle, Square, and even Revolut, have integrated cryptocurrency buying and selling, as well as spending in some instances, to attract new, savvy, customers to their portals.
It again goes back to the multifunctionality for people can not only use their standard virtual cash to buy and pay, but they can also invest and follow the cryptocurrency markets all in one app.
For the app creators, they are hitting the right notes by allowing cryptocurrencies, which are still very nascent, to attract a new type of user. But they are also doing a huge favour to the general cryptocurrency market as these digital tokens are being compared to something very similar to virtual cash.
Some forward-thinking banks and financial services have recognised the value of blockchain, the underlying technology powering cryptocurrencies, and started to incorporate elements of blockchain distributed network design to revamp their services. In a slightly different manner, through the example of XRP, cryptocurrencies are being used to entice new business, but also to normalise what could be the next, next, wave of payment possibilities.
For example, more than 100 banks have signed up with Ripple, to transform cross-border transfers with blockchain. AmEx is piloting a blockchain-based loyalty program with Boxed to offer more personalised rewards for customers.
With increased adoption, and use-cases, especially when it comes to spending, there will be a higher drive in the use of cryptocurrencies as a currency.
Cryptocurrency and payments are tied at the hip. For cryptocurrency to be mainstream, there needs to be a daily use case, which in the long run means you must be able to spend it. The more you can spend it the more people will be willing to accept it. At the start that spend will more often than not require a transition from crypto to traditional money. Retailers, employees will not be willing to accept the transfer cost themselves or accept the currency fluctuation risk. Try spending Euro's in New York, and you will not get far, so there is no reason to assume they will suddenly start taking Bitcoin when the risks are seen as even higher. So payment companies have a role in facilitating this transition.
If payment apps do have the current inside lane while cryptocurrency payment options are still mulled and explored, then one has to wonder what these cryptocurrency exchanges and payment solutions will look like in the future.
As already explained, the success of multifunctionality, and for cryptocurrency wallets and exchanges, this is the next step due to the nature of digital currencies and the entire digital realm they occupy.
Predicting the future of cryptocurrency-based payment solutions, most will expand by building an ecosystem of additional services, such as investment management tools or safe storage, and many will move towards other exchange services such as remittance payments or daily transactions in everyday life."
There is a lot that people want their money to be able to do, so the route to success for most will be to build an ecosystem that people need for everyday life.
The way in which people are making payments has been continuously evolving as new wants and needs emerge from the population. The path to mass adoption and acceptance always varies, but what is good to see is the potential of cryptocurrencies are being pushed by a payment method that has already made great strides to be the immediate future, payment apps.
Cryptocurrencies are almost ahead of their time, and there needs to be a stop gap, which can integrate with their possibilities, before there is a real adoption of cryptocurrencies for payments. If cash apps can do that, while offering cryptocurrency options in their multifunctional mandate, then the path for crypto payment adoption is already laid out.
The Future Of Payments Is Here - Crypto Payments
Payment businesses have gone through a revolution in the last few years. From blockchain, and FinTech to AI and cryptocurrencies, the world of international commerce is moving faster than ever.
The payment industry of the future is shaped by a mobile device or a computer. It happens at home and on the go. The shop is open 24 hours a day, and customers are demanding more from their platforms than ever before.
In 2019, E-commerce was responsible for around $3.53 trillion in sales, increasing from $2.92 trillion in 2018. By 2022, the global e-commerce is expected to rise to $5.69 trillion. This represents expected growth of 61% over the next three years. The digital marketplace is growing, and the future belongs to the businesses that can stay ahead of the curve.
Customers prefer to make their purchases from their mobile phones or tablets. A whopping 72 percent of E-commerce sales will take place on a mobile device by 2021. This is important for a couple of reasons. First and foremost, purchases can be made at home or on the go.
Now, unlike any time in history, you can order that pair of running shoes while standing in line to pick up a pizza. Sales can happen at any moment. This brings us to our next point: shops can stay open 24 hours a day. Even though the physical shoe store is closed, that online order can still be processed, anytime, anywhere.
While commerce has changed rapidly, it seems that online and offline payments have stayed relatively stationary. Most sales are processed through traditional methods like credit and debit cards. While this has been a decent medium of exchange for many years, new technologies are offering new options from additional payment systems.
Virtual assets such as Bitcoin are powerful financial tools which can transfer wealth immutably. They are decentralized so customers and merchants can transfer wealth between one another without having to go through banks. On the other hand, it's adoption currently is week because most of the blockchain-related payments are quite slow. The innovation will come in that stage for the crypto payments market to accelerate.
A cryptocurrency is a digital asset that is kept on a shared ledger called a blockchain. The blockchain cannot be altered, which means that funds and goods can be transferred trustfully. This increases transparency and reduces the possibility of fraud.
It is not a surprise to see that both merchants and consumers are turning to cryptocurrency payments, as a cheaper and more efficient payment solution. We have already seen major online merchants begin onboarding crypto payments.
The world is undisputedly moving towards a digital ecosystem. Cryptocurrencies are a promising addition to that ecosystem providing unparalleled benefits to consumers and merchants. Digital currencies have become a hot topic in the past two years mostly due to the rise of Bitcoin. In late 2017, bitcoin hit its all-time high of almost $20,000. This caught the attention of many investors from across the globe.
However, there are still people who do not know much about virtual currencies. They are versatile, secure, and can be used for buying and selling of goods online. A lot of industries like travel, clothing, food, etc. have already started accepting crypto payments. Let's see how accepting crypto payments can help your business grow and succeed.
Reasons To Start Accepting Cryptocurrency Payments
There was a time, not that long ago, when cash was king and financial institutions gave generous incentives to people who chose to put their cold hard cash into institutional coffers. Today, bank accounts of all sorts, as well as debit and credit cards, have fees associated with them - money that goes down the drain and provides no benefit, never mind interest earned. There are debit and credit card fees, ATM fees, merchant fees, checking account fees, overdraft fees, paper fees, check fees, transfer fees, change fees, charge-back fees, foreign transaction fees, minimum balance fees, inactivity fees, false decline fees, et cetera, et cetera.
Accepting crypto payments mean lower fees when compared to traditional payment systems. As of 2017, merchants paid $90 billion to Visa and Mastercard in credit card swipe fees alone.
This means that for every $100 you spend, $4 goes to credit card companies. There are debit card fees, credit card fees, ATM fees, transfer fees, overdraft fees, and whatnot.
In comparison, popular cryptocurrency payment gateways like Bitpay and Coinpayments charge between 0.5 perecent and 1 percent per transaction. In most cases, a cryptocurrency account in the form of a digital wallet is entirely free and unless one chooses to invest in cryptocurrency hardware wallets or prepaid cards, other than the transaction fee, using cryptocurrency as money costs absolutely nothing.
2. Sensitive Data
Banks and credit institutions, as well as retailers and service providers, obtain and retain too much of their customers.' personal and financial information. Details including our name, address, employers, social security number, net worth, assets, investments, account balances, credit score, credit line, and transaction history, along with everything we do and buy, who we associate with, when, where, etc. comprise our personal, professional and financial data sets. With traditional financial institutions and traditional fiat currency, we can no longer preserve our privacy.
Cryptocurrency transactions provide an alternative by limiting the amount of transaction data to mere numbers also known as cryptocurrency wallet addresses and transaction IDs confirming that a wallet-to-wallet transaction took place. A cryptocurrency payment processor acting as a third party will typically require your name (and shipping address for the delivery of physical goods), but the rest of your information will remain private as long as you don't connect your bank or credit card account and transact solely in BTC and altcoins.
So, as mentioned, with fiat currencies, it is impossible to preserve our privacy. However, virtual currencies assure a higher level of privacy. With crypto payments, the transaction data is limited to certain numbers. When a transaction takes place, the most you can know is a transaction id and the wallet address. The cryptocurrency payment processor will require your name and shipping address. No other information is shared with anyone. Thus, sensitive information is protected with crypto payments.
3. International Use
Cryptocurrencies are a borderless means of exchange allowing for instant and cost-effective transactions across the world. You don't have to wait for transactions to be processed, no international fees and no limitations as to who can or cannot send funds to whom or when and where those funds can be accessed. All that is needed is an internet-enabled device like a cellphone and someone without access to a banking institution is given an alternative solution with which they can pay bills, earn income, safe-keep their funds, make purchases and conduct business. Unlike banks, the transactions are completed within minutes.
Using cryptocurrencies while traveling adds an extra layer of security and can be used as a remote source of emergency funds that can be accessed without an ID, a bank account, credit cards, a wire transfer or even a personal computer device.
If you have a smartphone with an active internet connection, you're good to make transactions anytime you want. Also, cryptocurrencies are recognized everywhere. You can use them even when you don't have an ID or a bank account number. For businesses who are looking to acquire international customers, crypto payments are a must.
Accepting cryptocurrency online has never been easier. Shopify and Etsy merchants can select to accept BTC, BCH, and altcoins. Woocommerce and Easy Digital Downloads vendors can use WordPress plugins like Mycryptocheckout for the purpose. And then there's Shapeshift which gives customers the choice to pay with dozens of cryptocurrencies. Shapeshift is integrated with cryptocurrency payment processors like Bitpay and Coingate, and cryptocurrency wallets like Coinomi and Keepkey.
Moreover, there is Purse.io, an online platform where users can buy items from Amazon with cryptocurrency and it is also integrated with Shapeshift, as are Magento and Openbazaar. Setting up cryptocurrency payments is super simple and quick and merchant transaction fees are 60-70 percent lower compared to fiat transaction fees.
5. No Charge Backs
Enterprises have to bear a lot of loss due to chargebacks. Business owners complain that they lose a lot of money to chargebacks. A chargeback is basically a one-way scam where customers use the products and services for free by reporting fraudulent charges against the business to their credit card company. While it is not impossible to fight those charges, but it takes a lot of time and effort for the businesses that they finally decide to take up the loss.
Well, crypto payments can help here too. The transactions that take place cannot be altered. They are recorded on an immutable public ledger. Therefore, businesses can eliminate potential fraudulent chargebacks by accepting crypto payments.
Also, unfortunately, there are customers who make a purchase, receive the items they ordered and, perhaps, even use them only to cancel their payment. They can do this because fiat payments are not instant.
With cryptocurrencies, things are quite different. Once a transaction has occurred, there is no turning back. Funds 'travel' from one wallet to another, the transaction is recorded and it cannot be reversed. This is not to say that a customer cannot return an item and request a refund by communicating directly with the vendor. Of course they can. What they cannot do is place an order, pay for it, receive it and then get the sum they paid back on their account because of money back policies overseen by online payment processors and credit card companies.
Charge backs are meant to prevent fraud and yet they often accomplish the very opposite. In this instance, cryptocurrency works the same way as cash. After you've taken the item you paid for with cash, you can't go back to the store with a damaged or used item, never mind empty-handed, and demand your money back.
Mobile payments have become all the rage. Being able to use a smartphone in place of a credit card is awfully convenient.
From Paypal and Apple Pay to Mastercard's Paypass and Visa's Paywave with near-field communication (NFC) technology and modern POS terminals, getting the check has never been easier. And yet the same privacy and security issues arise as with the rest of traditional, fiat-based financial transactions, namely too much data in one place. All currently available mobile fiat payment processors store credit card information which include all of our financial information and more. Not to mention that all that data is online and on our mobile devices everywhere we go.
Cryptocurrencies are a safer digital cash option and are ideal for mobile payments by default due to their virtual, decentralized nature.
7. A Growing Market
Bitpay, one of the most successful crypto payment gateways, is processing $1 billion worth of transactions annually at a rate of a quarter million transactions per month. Coinpayments already serves millions of vendors in 200 countries and has just integrated with Bittorrent to give its 100 million users the option to pay with BTC and altcoins. Coingate serves 50,000 merchants and has processed hundreds of thousands of cryptocurrency payments, and Utrust just partnered with Payrexx and its 10,000 European merchants.
More integrations and partnerships between cryptocurrency payment processors and fiat payment processors are in the works and the market is expected to grow by 50 percent in the next two years. In particular, Foton announced plans to attract 100 million users by 2020 and offer competitive features including its own stablecoin, fiat pairs, atomic swaps, a loan and escrow service, and a payment card with loyalty rewards and cash back.
So there is no doubt: millions of merchants all over the world accept cryptocurrencies, as do tens of thousands of websites.
8. Commercial Use
It has been estimated that some 20 million people worldwide own cryptocurrency. Most others have heard of bitcoin and many plan on adding it to their portfolio.
Square, a credit card payment processor serving merchants, employers and mobile payment users, is gradually out-competing Paypal while also increasing its profits through BTC sales. The majority of Square's merchant customers have expressed interest in accepting bitcoin core and a 2017 Cambridge Centre for Alternative Finance study confirmed that 40 percent of consumers would, indeed, like to be able to make purchases with BTC.
Countries with weaker than average fiat currencies tend to favor the use of cryptos. Turkey, Venezuela, Brazil, Australia and South Africa appear to have large numbers of cryptocurrency users. In fact, a whopping 80 percent of Australians would like to use cryptocurrencies for daily purchases. Merchants in Eastern Europe and small western European towns seem more open toward adding bitcoin as a method of payment. Even before the 2017 cryptocurrency bull market, more than 10 percent of Eastern Europeans reported using cryptocurrency in place of fiat for everyday purchases.
Cryptocurrencies such as Bitcoin are based on blockchain which is a distributed, decentralized, digital ledger. The transactions made are permanent. They cannot be modified or deleted. So, the chances of fraud are reduced to a great extent. There will be no counterfeit attempts or identity theft. Besides, blockchain has never been hacked because, in order to change one block, the hacker will need to change all the other blocks on the blockchain since they're connected. It is enough proof that blockchain is secure. Moreover, you have complete control over your funds.
10. No Third Parties
Traditional payment methods involve a third party. You provide services to your customers and receive payments in your bank account for your services. But still, it is the bank who has control over your money. They can freeze your funds for whatever reasons. Also, your account can be closed if deemed necessary. This can result in huge monetary losses for businesses. But with crypto payments, that will not be a problem.
Since there is no third party involved, the money goes to your crypto wallet that you have full access to. No one else controls your wallet. So, the money stays with you no matter what. Also, the government has no control over the transactions nor they can keep an eye on the transactions. And they cannot take away your money as it happened in Cyprus.
Also, if you're a business owner who wants to stay ahead of the competitors, it is important that you keep up with the latest trends. You have all the great reasons to start accepting crypto payments.
More on Crypto payments
HUPAYX is a South Korean based payment platform which supports multiple cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), as well as PG/VAN based services which allow them to accept globally accessible credit cards. This solution platform supports fast and easy online and offline payments, safe storage of cryptocurrencies, trading and real-time market information. The company aims to "transform traditional payment infrastructure" with all-in-one blockchain-based cryptocurrency payment platform.
Combining usability with AML compliance, transparency, quick payment, and security, it offers multi-cryptocurrency wallets, which are accessible anytime, anywhere on your laptop, desktop, or mobile devices alike. The catchy point is, with the applicability of the platform, they're in the process to be implemented more than 400,000 locations in Seoul area.
Human Plus Inc, the founders of HUPAYX, is creating a new global paradigm in blockchain-based E-commerce economy. "Traditional payment infrastructure is not suitable to utilize cryptocurrencies in our everyday lives nor does it help us to eradicate existing cash ecosystem as a whole," said Aibek Amandanov, the Human Plus head of global marketing team.
They are also committed to creating an infrastructure where national governments, SMEs, solution providers, businesses, and the general public can benefit from by making or receiving payments with cryptocurrencies in their commercial activities such as buying milk or a coffee at their local shops.
Cryptocurrency payments have the potential of creating a more borderless and globalized economy, as well as fighting financial inequality by bringing fast and secured financial services to people without access to a bank. This is a big win for everyone in online and offline payments.