The innovation of the internet and online communication channels gave way to the development of e-business platforms. As long as you can communicate with your customers over a long distance, you can sell the items they need and use various shipping companies to deliver them. There are multiple methods customers can use to pay for goods they buy online.
In this post, we focus on the essence of digital currency in building eCommerce. The digital currency, commonly known as cryptocurrency, was developed to solve the financial and security barrier that hinders eCommerce growth. But how does development promote business growth through eCommerce?
1. Direct and Fast Payments:
Buyers can use various methods to pay for the merchandise they order online. However, various transaction restrictions can sometimes mess the process by putting the payment on hold for long hours or days making the process inconvenient. Delayed payments also mean delayed delivery and missed opportunities.
What usually happens is that a credit card payment, for example, has to be verified by four to six parties before it completes. On lucky occasions, the payment can go through within a few seconds. Sometimes, if one party thinks that the payment is not authentic, it will block the customer from paying.
When using digital payments, the process is only between the customer and the merchant. Although the payment happens on a blockchain network, nobody controls the payment. Without a middleman, transactions are fast and reliable. Businesses can seamlessly seal the sales through their Magento PWA process.
2. A More Secure Payment Platform:
Credit card fraud is ever higher since eCommerce emerged. One can opt for Xamarin app development company to build up a secure eCommerce app. Online payments process credit card numbers and save customers’ sensitive information, and when hackers attack a network, they can steal the information and make fraudulent purchases or transfer funds. Many businesses and customers have lost vast amounts of money through cyber fraud. In 2019, the loss complaints are estimated to be US$3.5 billion.
To avoid these cases, it is essential to stop sharing payment information when making purchases online. Cryptocurrency is the only universal way that you can use to pay online without revealing your banking information. You can buy the digital currency of an equivalent amount you want to spend on a product instead of paying with your checking account or credit card.
Because of the way blockchain is configured, hackers cannot break into the network without proper authentication. They cannot, therefore, manipulate the payments made on the blockchain network. The information is also encrypted through cryptography and distributed through the network to avoid malicious access to the data. This encryption protects both the merchant and the buyer without the need for third-party surveillance.
3. Crypto Payments Open Borders for Businesses:
If you ask every business person, they will tell you that they want to expand their investments beyond their borders. Making your business global is the only way you can dominate a market by offering solutions to people who can buy your merchandise from any part of the world.
The only problem that cross-border businesses encounter is payments. Not every country allows its citizens to pay or send money abroad. That means that some customers cannot use credit cards to pay for the products they wish to buy from you unless you reside in the same country. Some regulations completely prohibit online payment transactions.
With digital currency, there is no control over the destination you want to send payments. Anybody can buy whatever they need and process the payment from any part of the world. This freedom allows customers to shop for better products or from brands they trust. Sellers also get the opportunity to trade without restrictions as long as they can deliver the goods to the customers.
4. Cryptocurrency Promotes Business Reliability
Cryptocurrency is a decentralized asset. Nobody has control over your funds except you. When you receive and send money on a blockchain network, the funds become available for the recipient to use immediately. This is unlikely with the other payment methods which will most likely ask you to wait for about two weeks for the money to be available.
As a business, you want to spend the money immediately when you make sales so that you can settle various business expenses. Whether you want to restock, pay your workers, or innovate, you need access to your money as soon as possible. The earlier you settle invoices and employee salaries, the more credible and reliable your eCommerce business becomes.
5. Reduced Transaction Fees:
With every payment, fees are mandatory. But how much do you pay when making sales on your e-business? Various payment gateways charge differently for the sales you make on your e-business site. For most transactions, you would pay a base percentage of the total sales. For instance, credit cards charge around 3.3%-4%. If you sell a product for $1k, you will need to pay $40 as the fee, which will be deducted from your sales. It reduces the profit margin you make from each sale.
In most cases, merchants decide to offset their prices to cover the transaction charges so that they do not make losses when selling online. However, in doing so, the customer suffers by paying extra for the commodity. And at times, they are also charged fees which include currency conversion and VAT.
Digital currency becomes the solution which both sellers and buyers have been waiting for. Paying through Bitcoin, for example, charges a cheaper rate to complete a transaction. The merchant does not incur the transaction cost. Therefore, merchants can offer discounts to customers and still make sustainable profits. Since Bitcoin transactions are not charged as a percentage, the buyer and seller can both gain when making transactions for bulk sales.
6. Long-Term Investments:
The price of Bitcoin and other cryptocurrencies vary according to the immediate market demand. However, the value of the ordinary currency is affected by inflation. During inflation, the ability of a currency to buy goes down, and you need more money to buy the things you used to buy with little earlier.
Digital currency is not affected by inflation. There is no way to inject more bitcoins into the network to affect the currency’s buying power. When all the bitcoins (21 million) will have been mined, the number will remain constant. It means that even when the banknotes lose value, Bitcoin will be stronger, and you can make returns from long-term investments.
As long as you have sufficient liquid money to run the business, you can receive payments in the form of digital currency and use it to invest in other assets. That will open new opportunities for future innovations while still running your eCommerce business.
7. Cryptocurrency Attracts New Customers:
Some customers have preferences when making purchases. Because of the ease of use and low transaction rates, many customers prefer paying only through digital currency. As more customers embrace digital currency, they need suppliers who can accept the assets as a form of payment. Customer security is essential, and that has become a major factor to consider before making purchase decisions.
You should do research and see how businesses in your industry are handling digital currency payments. If your competitors are accepting bitcoin, for example, and you are only processing payments via credit cards, then you are losing your customers. This is especially true if you are selling digital goods. Nobody wants to provide their information unless you need it to deliver the goods to their homes.
While setting online businesses has helped investors to expand their market, payments have not been very successful with the traditional payment methods. The development of digital currency was established to give ownership and control of funds back to the owner. As a decentralized currency, Bitcoin has helped many people to handle and spend their money easily and more securely. Accepting digital currency as a form of payment on your eCommerce site can both help your business to expand and protect your money.