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Lyndall Spooner, founder and CEO of research agency Fifth Dimension Consulting, is urging businesses to adopt cryptocurrencies as a payment method to meet the basic needs of a growing consumer base that invests in and uses digital assets — but do so wisely.
“Our research shows that customer experience is no longer about traditional elements such as touchpoints and product delivery time frames, it is also about the capacity and speed of an organization to adopt new technologies that facilitate a better journey to purchase, and cryptocurrencies fall into this. category,” Spooner said.
“Companies can no longer stick their heads in the sand and pretend that cryptocurrencies don’t exist. It does, and the largest consumer group in the world invests in it and uses it in a very utilitarian way.”
Several research studies have shown that millions of Australians are actively interested in buying cryptocurrencies, and interest is highest among millennials and Gen Z, at around one in three people. Initially, cryptocurrencies were considered a strong alternative investment option, especially among those who cannot afford real estate, but now cryptocurrencies are considered the preferred currency.
Widely respected, Spooner has more than 25 years of consulting and research experience and is regarded as an expert in strategy, research and customer experience. Fifth Dimension Consulting, which he leads, is a strategic research and consultancy agency that has amassed a significant portfolio of well-known clients including: Westpac, Coles, HCF, Telstra, Foxtel, Colgate and the Commonwealth Bank.
“Many businesses across Australia are already accepting cryptocurrencies as a form of payment,” Spooner said. “The blockchain sector has developed significantly over the past few years and there are a number of trading platforms that provide businesses with the ability to accept cryptocurrency payments.”
Further reading: Leaders in financial services are gaining confidence in blockchain.
According to Leigh Travers, CEO of Binance Australia, with Australia going fully cashless by 2031 as Covid-19 accelerates the death of physical currency, crypto will play an increasingly large role in payments in the future.
“Australian cryptocurrency users and merchants will soon be able to receive and pay with cryptocurrencies with greater ease thanks to Binance Pay. Binance Pay is a contactless, borderless and secure cryptocurrency payment feature between users on the Binance app with over 40 supported cryptocurrencies,” said Travers.
“Binance Pay allows users to pay, send and receive crypto payments worldwide without any fees. Binance Pay also enables merchant-based transactions and allows users and merchants to choose their preferred payment options.”
Win-win
According to Spooner, cryptocurrency payments provide benefits to both consumers and businesses. “Many people who buy cryptocurrencies do so because of the democratized nature of cryptocurrencies, ease of trading, low barriers to entry, and strong and fast financial rewards,” Spooner said.
“In addition to investing in cryptocurrencies, they also want to be able to use their crypto to buy things. Utility is important. Essentially, Gen Z and Millennials want cryptocurrencies to become a part of everyday life, and retailers are perfectly positioned to play a key role in realizing this goal.
The volatile nature of cryptocurrencies is of course a major concern for businesses, exposing businesses to financial risk if the currency loses significant value, and conversely to financial upside if the currency increases in value. Payment services can now act as an intermediary between the payer and the payee when converting cryptocurrencies to the currency of their choice (fiat currency) – thus eliminating the risk of volatility.
Therefore, the long-term question for businesses is not whether they should accept cryptocurrencies and their volatility, but which currencies they should accept.
There are currently over 7,800 cryptocurrencies and over 2,000 cryptocurrencies that have failed. Many of these currencies, such as Bitcoin, require significant energy to mine the coins, which makes them significant carbon polluters and the reason why some companies like Tesla and some governments have stopped accepting them.
As companies strive to become more sustainable and reduce their carbon footprint, this will put pressure on current leading cryptocurrencies such as Bitcoin. Companies will have the power to steer consumers toward “greener” cryptocurrencies that don’t require as much energy to mine.
The benefits of adopting cryptocurrency
With the release of digital services like Binance Pay and others, the acceptance of smaller cryptocurrencies will increase. Many of these smaller cryptocurrencies are also significantly cheaper to process than Bitcoin – so increased competition will lead to the rise of new leading cryptocurrencies that will benefit both businesses and consumers.
Spooner outlined the benefits to businesses and consumers of adopting cryptocurrencies as a payment method.
Customer convenience when shopping
“Adding cryptocurrency as a form of payment gives buyers another way to pay. The more payment methods, the better the customer experience for shoppers,” said Spooner.
“In the online environment, brand owners need to understand that increased payment options smooth the path to purchase. In many cases, this makes the purchase decision easier and more appealing.”
The funds are immediate
“For retailers, the availability of funds is almost instantaneous. “Cryptocurrency trading platforms provide businesses with tools that allow them to accept fiat crypto payments very quickly,” added Spooner. “It’s much better than having to wait days for traditional credit cards to deposit funds into retailers’ bank accounts.”
Lower transaction costs
“The processing costs of some cryptocurrencies are cheaper for businesses, meaning less of the cost is passed on to shoppers. Credit card payment providers typically charge an average transaction fee of one to two percent. Some crypto transactions may cost less,” Spooner said.
Global liquidity
One of the biggest advantages of cryptocurrencies is the time and cost savings of cross-border payments. Payments can be made 24/7/365, settled instantly, and transactions are relatively cheap (depending on the token). Traditional FX systems cannot compete,” Spooner emphasized.
Eliminate chargeback fraud
“For businesses, the risk of chargeback fraud is eliminated. “Crypto payments are immutable, meaning that once a payment is made, it cannot be reversed,” Spooner said.
“Crypto payments are considered more secure and less likely to be targeted by fraud and DDoS attacks.”
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