Should More Retailers Accept Cryptocurrency as Payment?

Business News Daily describes cryptocurrency as a digital form of currency that uses peer-to-peer blockchain technology, operating independently of central banks or government control. Transactions occur directly between buyers and sellers, bypassing traditional third-party payment processors.

Since Bitcoin was first introduced in 2009, cryptocurrency is now traded around the clock and gaining broader acceptance as a payment method.

Retailers are increasingly adopting cryptocurrency as a payment option to cater to customer preferences and stay competitive in a digital marketplace, according to Retail Technology Innovation Hub. The outlet notes that accepting crypto is “seen as one of the best means to futureproof a business.”

This shift also reflects a growing recognition of crypto’s practical benefits, including low transaction fees and its suitability for international money transfers. Recent surveys show that nearly 25% of consumers have used digital currencies for remittances, while sectors like online gaming are also embracing crypto. Regulatory changes, such as the UK’s new classification of digital assets as personal property, are further legitimizing its use in retail.

Incorporating cryptocurrency alongside traditional payment methods offers retailers significant advantages. With lower fees compared to platforms like PayPal, crypto transactions can reduce costs for businesses. Additionally, the security provided by blockchain technology ensures transaction transparency and protection against cyber threats, such as stolen credit card numbers. The borderless nature of cryptocurrencies also enables retailers to expand their global reach without incurring currency conversion fees, positioning crypto as a valuable tool for growth in the retail sector.

Additionally, e-commerce platform BigCommerce reports the following potential benefits:

• Customer privacy: Cryptocurrency transactions do not require personal information, protecting customers’ financial data from third parties like banks and advertisers.
• Transaction speed: Payments are processed almost instantly without intermediaries, allowing for quicker transfers and often lower fees compared to traditional payment methods.
• Easy integration: Cryptocurrency can be easily added alongside other payment options (e.g., credit cards, PayPal), enabling a streamlined checkout process for a global customer base.

According to Deloitte, an estimated 2,352 U.S. businesses accepted Bitcoin as of late 2022, excluding Bitcoin ATMs. An expanding number of companies worldwide are utilizing Bitcoin and other digital assets for various investment, operational, and transactional needs. A Deloitte survey of 2,000 senior U.S. consumer business executives found that many merchants are adopting digital currency payments both to gain a competitive edge and in anticipation of continued growth in digital currency usage.

In November 2023, Sherwen shared that more than 15,000 businesses globally accepted Bitcoin as a form of payment. Some of these include Starbucks, Home Depot, and Whole Foods. In the UK, however, cryptocurrency acceptance in the retail sector was nearly nonexistent at the time. Many mainstream retailers remain wary of cryptocurrency, viewing it as a risk.

Some global banks even classify crypto transactions as fraudulent. In the e-commerce space, however, acceptance is growing. While Etsy doesn’t directly support Bitcoin payments, individual merchants can offer it at checkout. Shopify also allows online sellers to accept cryptocurrency, indicating a more open approach in the digital marketplace.

Business News Daily explains that cryptocurrency is known for its significant price volatility, which can lead to unpredictable value changes. For instance, Bitcoin surged from mere pennies in 2009 to over $64,000 per coin in February 2021, only to plummet to below $28,500 per coin by May 2023. To mitigate this risk, experts recommend quickly converting cryptocurrency back into local currency.

Additionally, Cryptocurrency transactions still face some security risks, as digital wallets are vulnerable to cybercriminals and are not insured like fiat currencies. Companies like Coinbase are working on measures to protect assets, such as insurance for losses. Regulatory uncertainty also looms, with lawmakers developing new rules. Businesses must adapt to these changes, as the IRS classifies cryptocurrency as “property” or a “digital asset,” subjecting transactions to taxation.