Do Cryptocurrencies Have a Future in Ecommerce?
Sticking to an online business model has a lot of advantages. You get to save on overheads, don’t have to sit with excessive amounts of stock, and have access to a wider range of potential clients. That doesn’t mean that eCommerce is easy, though.
In fact, it can be downright difficult. Building trust with someone online is more difficult, especially if they have never had dealings with your company before. Clients have to trust a lot of personal information about themselves to you and your business.
This is an especially sensitive area when it comes down to making payments – everyone has heard horror stories of credit card info being stolen, or company websites being hacked. It was one of the things that hobbled online sales initially.
Then PayPal came along and made it possible to pay without giving out any of your credit card details at all. It was rightly termed one of the most important advances in the eCommerce space.
The future of cryptocurrencies as a payment solution
Cryptocurrencies could well be the next stage of that evolution. Look at how popular Bitcoin, Ripple, and Ether have become, to name just a few. But what exactly is the big attraction of these currencies? Are they just a different kind of PayPal?
Cryptos are similar to PayPal in that you never give your credit card details to the merchant. But that’s about where the similarity ends. With cryptos, you don’t need a credit card or even a bank, to begin with.
What PayPal does is to facilitate the transfer of funds from your card to the merchant’s account. What cryptos do is to transfer the funds directly to the merchant. It’s simpler and cleaner because there is no third party needed to facilitate the transfer.
It is big news for the vendors because it means they get their money immediately. It is good news for the consumers because the simpler system means reduced costs. The benefits for both parties are why we have seen so many companies accepting Bitcoin now.
Online travel giant Expedia, which features heavily on 16best.net discount pages, is just one of the companies that has already hopped on the bandwagon. To extend the metaphor, Expedia actually drives the proverbial bandwagon, as it was one of the earliest really big BTC adopters. And there are many other big names on that list as well – like Remax and Shopify, for example.
Cryptocurrencies – is it safe?
Are there issues to be ironed out? For sure. For one thing, Bitcoin transactions are irreversible. If you send 50 bitcoins instead of 5 by accident, you have to hope the other party sends the excess back.
When it comes to eCommerce, this could be a serious problem. After all, the reason a client likes to use crypto in the first place is that she doesn’t have to trust you with her personal details. If there is the possibility of something like this happening, it’s not going to build trust.
Another issue is the volatility of the cryptocurrency market. Fiat currency values also fluctuate, but not quite to the same extent. Heavy fluctuations in crypto values could make it harder for companies to effectively manage their profit margins.
It’s fine if the value goes up, but what happens if it crashes?
Still, despite these issues, cryptos do hold a lot of promise as a payment solution and so are bound to feature more highly in the ecommerce space in future.