Tesla’s temporary acceptance of Bitcoin (BTC), as a payment method for its products, was one of the catalysts that drove asset prices to record heights last year. It also put the spotlight on crypto legitimacy in the area of payments. Crypto enthusiasts were also pleased that Tesla set up its own Bitcoin node and said that it would not swap its bitcoin holdings for fiat. This indicated high confidence in crypto’s long-term prospects.
However, Tesla was still a small part of the 2021 adoption machine. Despite having stopped accepting Bitcoin a few months later due to climate issues, AMC Entertainment, Whole Foods, and Starbucks were some of the other crypto juggernauts to make their debut last year. It’s clear that headlines are more important than household names. It’s up to other businesses to get on board with the trend.
The latest report from Cointelegraph Research provides the answers. This paper covers the growing trend of crypto acceptance as well as practical ways that businesses can incorporate cryptocurrencies into their business operations. It is 35 pages long. The report examines the future of cryptocurrency in payments, including regulation and much more.
Why should crypto be accepted by businesses?
The 178% increase in global crypto population indicates that cryptocurrencies may be in a phase where they are becoming more popular. Businesses could expand their client base by accommodating this expanding population. It is much cheaper to receive payments in crypto than using TradFi methods. This could help improve a company’s bottom line. Merchants can save as much as 3.5% on fees if they use crypto instead of credit or debit cards.
You can download the complete report, including charts and infographics, here
TradFi payment methods have a number of drawbacks. In 2021, chargebacks will cost e-commerce merchants $125 million. Chargebacks can be a form of payment reversal in which the merchant refunds the amount to the customer due a transaction dispute, or if the customer returns a product. Chargebacks may also be fraud. Some customers may dispute a transaction in order to receive a refund, despite not having any issues with the product.
The process is the same, but the method used to make the transaction differs depending on whether a company has its own Tesla node or uses a payment processor. Certain payments processors, for example, can enable a merchant to accept crypto and also allow real-time settlement in fiat. This allows the merchant to accept digital assets while removing price volatility. The downside to this is that the company will be subject to lengthy TradFi procedures.
There is another side to this coin. You can accept the actual cryptocurrency-asset fully. There are many reasons to do so. While long-term price appreciation is the main argument, companies can also keep crypto assets in reserve for unforeseen circumstances. Merchants have additional revenue potential by taking advantage of the various avenues within the crypto space. For example, locking cryptos into DeFi protocols to generate yield from staking and lending.
The merchant will ultimately decide which channel is best to receive crypto assets. It is important to consider whether the goal is to either hold cryptocurrencies or tap into the expanding crypto customer base, or both.
The full report is available for download, which includes charts and infographics from the Cointelegraph Research Terminal.
This article is intended for information only. It does not constitute investment advice, an investment analysis, or an invitation to purchase or sell financial instruments. The document is not intended to replace individual investment advice or any other advice.