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Op-Ed
This article on cryptocurrency payments was written by Thomas Highwater, who is a avid fan of all things encrypted. Mr. Highwater teaches robotics and programming at the high school level.
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While there is an increasing number of fiat-based payment processors with a variety of practical tools and payment methods, the addition of cryptocurrency payments in the mix offers consumers and traders unparalleled benefits. Some of these benefits include simplicity, lower overall cost, security, privacy and a greater level of control over your funds.
Reasons to use Crypto next year
Read also: Wendy McElroy: avoid fraud by going to the crypto-anarchist
Cryptocurrencies are numerous and versatile and can be used as private bank accounts and payment cards for almost any occasion. They offer a multitude of ways to earn a form of interest with little or no effort and help users protect sensitive data and businesses on the move 24 hours a day, 7 days a week.
There was a time, not so long ago, when money was king and financial institutions gave generous incentives to people who chose to put their cold and hard money into institutional coffers. Today, bank accounts of all kinds, as well as debit and credit cards, have commissions associated with them – the money that goes down and provides no advantage, no matter the interest earned. There are debit and credit card fees, debit card fees, merchant fees, current account fees, overdraft fees, collection fees, transfer fees, change commissions, foreign transaction fees, minimum balance fees, inactivity fees , false refuse taxes, etcetera, etc.
In comparison, the most popular cryptocurrency payment gateways such as Bitpay and Coinpayments require a rate ranging from 0.5 percentages to 1 percent per transaction. In most cases, a cryptocurrency account in the form of a digital wallet is completely free and, unless you choose to invest in cryptocurrency or prepaid cards, in addition to transaction fees, the use of cryptocurrency as money does not cost anything at all.
2. Sensitive data
Banks and lenders, as well as resellers and service providers, obtain and store too much personal and financial information from their clients. 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, at who we associate with, when, where, etc. include 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 simple numbers also known as cryptocurrency addresses and transaction IDs that confirm the transaction from portfolio to portfolio. Generally a cryptocurrency payment processor that acts as a third party requires your name (and the shipping address for physical goods delivery), but the rest of your information will remain private until you connect your bank account or of the credit card and make transactions exclusively in BTC and altcoin.
3. International use
Cryptocurrencies are a means of seamless exchange that allows instant and convenient transactions worldwide. There is no waiting, no international spending and no limitation on who can or can not send funds to whom or when and where these funds can be accessed. All you need is an Internet-enabled device such as a mobile phone and someone without access to a banking institution is given an alternative solution to pay bills, earn income, keep their funds safe, make purchases and conduct business.
The use of cryptocurrencies during travel adds an additional level of security and can be used as a remote source of emergency funds that can be accessed without an ID, a bank account, credit card, wire transfer or even a device personnel.
4. E-commerce
Accepting online cryptocurrency has never been easier. Shopify and Etsy merchants can choose to accept BTC, BCH and altcoin. The suppliers of Woocommerce and Easy Digital Download can use WordPress plugins such as Mycryptocheckout for the purpose. And then there's Shapeshift that offers customers the chance to pay with dozens of cryptocurrencies. Shapeshift is integrated with cryptocurrency payment processors such as Bitpay and Coingate and cryptocurrency portfolios such as Coinomi and Keepkey.
In addition, there is Purse.io, an online platform where users can purchase items from Amazon with cryptocurrency and is also integrated with Shapeshift, as well as Magento and Openbazaar. Setting up cryptocurrency payments is very simple and fast and commissions for commercial transactions are 60-70 percent lower than fiat transaction fees.
5. No back charging
Unfortunately, there are customers who make a purchase, receive the items they have ordered, and perhaps even use them to cancel their payment. They can do it because fiat payments are not instantaneous.
With cryptocurrencies, things are very different. Once a transaction has occurred, you can not go back. Transferring funds from one portfolio to another, the transaction is recorded and can not be canceled. This does not mean that a customer can not return an item and request a refund by communicating directly with the seller. Of course they can. What they can not do is place an order, pay it, receive it, and then get the amount they returned to their account due to the reimbursement policies incurred by online payment processors and credit card companies.
The objections are intended to prevent fraud and yet often they get the exact opposite. In this case, cryptocurrency works the same way as cash. After taking the item paid with cash, you can not return to the store with a damaged or used item, it does not matter with empty hands, and you ask for your money back.
6. Mobility
Mobile payments have become fashionable. Being able to use a smartphone instead of a credit card is terribly convenient.
From Paypal and Apple Pay to Mastercard Paypass and Visa Paywave with near-field communication technology (NFC) and modern POS terminals, getting control has never been so easy. Yet the same privacy and security issues occur as in the rest of traditional fiat-based financial transactions, or too much data in a single position. All currently available mobile fiat payment processors store credit card information that includes all our financial information and more. Not to mention the fact that all data is online and on our mobile devices wherever we go.
Cryptocurrencies are a more secure digital cash option and are ideal for mobile payments by default due to their virtual and decentralized nature.
7. A growing market
Bitpay, one of the most successful cryptographic payment gateways, is processing transactions worth $ 1 billion a year at the rate of a quarter of a million transactions a month. Coinpayments already serves millions of sellers in 200 countries and it has just merged with Bittorrent to give its 100 million users the ability to pay with BTC and altcoin. It serves Coingate 50,000 traders and has processed hundreds of thousands of cryptocurrency payments, and only Utrust collaborated with Payrexx and its 10,000 European traders.
Further additions and partnerships between cryptocurrency payment processors and fiat payment processors are underway and the market is expected grow 50 percent over the next two years. In particular, Foton has announced plans to attract 100 million users by 2020 and offer competitive features including its own stablecoin, fiat pair, atomic swap, a loan and escrow service and a payment card with loyalty and cash back prizes.
So there is no doubt: millions of merchants around the world accept cryptocurrencies, as well as tens of thousands of websites.
8. Commercial use
Has been valued that around 20 million people worldwide have cryptocurrency. Many others have heard of bitcoins and many think they add it to their wallet.
Square, a credit card payment processor that serves merchants, employers and mobile payments users, is gradually overcoming Paypal's competition while increasing its profits through BTC sales. Most of Square's business customers have expressed interest in accepting bitcoin core and a 2017 Cambridge Center for Alternative Finance study confirmed that 40 percent of consumers would, in fact, be able to make purchases with BTC.
Countries with fiat currencies weaker than the average tend to favor the use of cryptosides. Turkey, Venezuela, Brazil, Australia and South Africa appear to have a large number of cryptocurrency users. In fact, a huge one 80 percent Australians would like to use cryptocurrencies for daily purchases. Eastern European traders and small Western European cities seem more open to adding bitcoins as a payment method. Even before the cryptocurrency market in 2017, over 10% of Europeans in the East reported using cryptocurrency instead of fiat for everyday purchases.
Crypto as money
Nowadays, almost everything can be paid directly with cryptocurrencies: houses, condominiums, boats, cars, clothing, electronics, health and pet products, food, wine, accessories, airline tickets, holidays, instruments, musical instruments, as well as services appointments, professional services, internet services and, of course, crypto.
Without highlighting the obvious, let's take a look at the most interesting things that digital currencies can buy you:
- Enjoy a Thai or Indian restaurant in Montreal or sample the Dutch pancakes in Aruba
- Buy vintage furniture in Massachusetts or rent an office in Miami
- See the Cerro Negro volcano in Nicaragua or rent a yacht in South Florida
- Buy a Benz or a Beamer in California or a Rolex in Europe
The market according to the experts
In January, a company called Bakkt, owned by the Intercontinental Exchange (ICE) which also owns the New York Stock Exchange (NYSE), will launch the bitcoin futures to be settled in BTC, not cash. Its partners include Microsoft, Starbucks and Pantera Capital. There will be no leverage transactions, which means that the actual bitcoin will have to be purchased and held for the duration of the contract. Given that these are institutional investors, the volume of BTC should reach new heights. ICE CEO and NYSE president Jeff Sprecher he has declared that digital resources are here to stay and that "they have a future in regulated markets".
It is clear that the cryptocurrency industry has grown by leaps and bounds over the last 10 years since the birth of Bitcoin. Fintech is transforming the financial sector and more and more people are coming on board. Buying in-store and online is becoming completely digital but increases the fears of cyber security, which can be drastically reduced with wider acceptance of cryptocurrencies as a means of payment.
Do you think that the payments in the crypt will continue to grow? Is this the path to mass adoption?
Images courtesy of Shutterstock
Disclaimer OP-ed: This is an Op-ed article. The opinions expressed in this article belong to the author. Bitcoin.com does not endorse or support opinions, opinions or conclusions drawn in this post. Bitcoin.com is not responsible for any content, accuracy or quality within the Op-ed article. Readers must exercise due diligence before taking any action related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use or reliance on any information in this Op-ed article.
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