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Crypto transactions have no protections or recourse, once the transaction is done, it’s done. Crypto payments: What to watch out for? Blockchain is a relatively new innovation, and with it comes the need to engage thoughtfully in the application of e-commerce and payments. with decentralized identity or DID, potentially eliminating the use of passwords, which reduces the opportunity for hackers to intercept, hence providing more security for the user’s account on the e-commerce platform. Other than crypto payments, blockchain is also changing how people verify their identity, i.e. Customers can be confident their data is safe and cannot be seen by anyone without permission or credentials. Greater data securityĭue to the immutable, transparent, and decentralized properties of blockchain, it is being used to enhance the interaction between technology and customer privacy, and to secure data sharing. Accepting crypto payments will be beneficial in allowing these e-commerce companies to unlock revenue streams in new markets. It is especially attractive for commerce in markets where many consumers are “unbanked” and have less access to traditional bank methods, or where other popular payment methods are difficult to use. Opens up new marketsĬrypto payments help to address the challenges of cross-border payments, as digital currencies are independent of any state or third party, which makes it easy for anyone to hold crypto and transact. Though some may debate that scalability, accessibility, and ease of operation continue to pose challenges to wider-scale adoption and implementation of crypto payments, it has inspired many legacy businesses to re-evaluate their technology platforms and processes to incorporate this. Instead of waiting days or even weeks for FX payments to settle, settlement takes place within hours.
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This enables businesses to accept crypto and convert it to fiat currency quickly. More businesses are starting to embrace stablecoins as an official mode of payment, due to the faster processing times and lower costs compared to traditional fiat settlement rails. Faster transactions and payment processing
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This also helps to prevent fraud in the e-commerce system process, as all transactions are legitimate and accountable.
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Once a crypto transaction happens and payment is made, it is recorded on an immutable ledger and is permanent. Also, cryptocurrency payments are chargeback-proof, which will be helpful because chargebacks are painful. Lower costs and risksĪccording to the same report, the transaction fees associated with crypto payments are much lower – around 1%, compared with credit cards or payment apps that could charge anywhere from 3%-5%, and this is possible because the direct transaction eliminates the middlemen who add to the costs. It can automate tasks based on preset rules and logic, such as automatic payments or inventory management, enabling businesses to authenticate transactions quickly and with greater accuracy and efficiency, resulting in a more cost-effective process. Using blockchain, businesses are redefining how online transactions are processed, through the use of tokens and smart contracts. As an alternative payment system built on the blockchain ledger, cryptocurrency is the digital alternative to traditional fiat currencies, and the blockchain – the transparent, distributed ledger where all crypto transactions are recorded, offers e-commerce businesses many benefits including lower costs and risks, higher speed, greater data security, and the opportunity to open up new markets and demographics. How does blockchain drive change in e-commerce and payments?Īccording to the latest survey conducted by PMNTS and BitPay, 85% of businesses are adopting crypto payments to find and gain new customers.