Tesla temporarily embraces Bitcoin (bitcoin) as a payment method for its product, it is conceivable that it was one of the catalysts that propelled asset prices to record highs last year and put the spotlight on the legitimacy of cryptocurrencies — especially in payments. In addition, crypto enthusiasts praised Tesla for even setting up its own node to accept BTC, saying that it will not exchange its holdings for fiat currency, implying confidence in the cryptocurrency’s long-term prospects.
But despite backtracking and stop accepting bitcoin A few months later, Tesla is just a cog in the 2021 adoption machine due to climate concerns. Starbucks, Whole Foods, and AMC Entertainment are just some of the other giants that have ventured into the crypto space last year. What is clear, however, is that the headliners are household names. For other businesses looking to jump on the bandwagon, it’s a question of how to get started.
A new report from Cointelegraph Research provides the answer. The 35-page paper discusses the booming trend in cryptocurrency acceptance and practical ways any business can integrate cryptocurrency into its operations. Additionally, the report looks at the future of cryptocurrencies in payments, especially in terms of regulation and more.
Why should businesses embrace cryptocurrencies?
Cryptocurrencies are considered to be in the over-adopting stage, and Global Crypto Population Increases 178% is further proof. For businesses, adapting to this growing population will mean expanding their potential customer base. It is also much cheaper to receive payments in cryptocurrencies compared to the TradFi method, which may improve the company’s bottom line. Merchants can save up to 3.5%—or more—if the payment method is cryptocurrency rather than a credit or debit card.
Chargebacks are also another downside of the TradFi payment method, costing e-commerce merchants $125 billion in 2021. A chargeback is a payment reversal where a merchant returns money to a customer due to a transaction dispute or a customer returning a purchased product. However, refunds can also be downright fraudulent, as some customers may dispute the transaction to secure a refund despite zero issues with the product or its delivery.
The process of accepting encryption
Whether a company builds its own node like Tesla or chooses a payment processor to facilitate transactions, the way to do so is more or less the same, but different under the hood. For example, some payment processors may allow merchants to receive cryptocurrency, but also enable fiat real-time settlement. This effectively eliminates price volatility while giving merchants the flexibility to accept digital assets. The downside, of course, is that it subject the company to the often lengthy procedures in TradFi.
The flip side is to wholeheartedly embrace actual cryptoassets for a variety of reasons. Long-term price appreciation is the most common argument, but companies can also hold crypto-assets for a rainy day. Merchants can also earn additional income by taking advantage of the avenues available in the crypto space, such as locking up cryptocurrencies in DeFi protocols to earn from staking or borrowing.
Ultimately, the determinant of which channel to receive cryptoassets will depend on the merchant. The factor to consider is whether the goal is to hold cryptocurrencies or take advantage of the growing crypto customer base — or even both.
Download the full report with more detailswith graphs and infographics available on the Cointelegraph research terminal.
This article is for informational purposes only and does not represent investment advice, nor does it represent investment analysis or an invitation to buy or sell financial instruments. Specifically, this document is not a substitute for personal investment or other advice.