E-commerce has had an incredible impact on the macroeconomy. Now, cryptocurrencies are having a similar impact.
The impact of disrupting the way people show, what they buy, and most important — how they pay for it.
Due to these disruptions, an increasing number of businesses are incorporating this technology into their functionality.
And it’s not only businesses in eCommerce that are being influenced by cryptocurrencies. The biggest nations in the world are developing cryptocurrencies.
China is a great example. They’re developing the e-yuan — and its deployment could cause an economic arms race.
Therefore, the probability that cryptocurrencies will become a universal means of digital cash, as well as digital assets, has never been higher.
It’s past time we discuss why you should learn about cryptocurrency and experiment with them in your eCommerce business to get a competitive edge.
1. Low-fee & No-fee micropayments
Let’s start with the central pillar of all business — money.
Calvin Hennick, writer for BizWeek, points out that certain cryptocurrencies running on hyperfast blockchains could reduce fees significantly.
“Public blockchains charge a fee of about 1 cent for every transaction; private blockchains offer even lower transaction costs. This makes blockchain a preferable facilitator of payment for obvious reasons […] such low costs are also opening the door to rapid micropayments.”
As people shop more and more online, they will gravitate toward such fast and inexpensive payment options. The e-commerce company which develops them will have advantages.
2. Security
We’ve heard of major data breaches in the news every year. The major Equifax data breach could cost the company, by some estimates, close to $10 billion USD. Cryptocurrencies could combat this.
UPS recently announced a new blockchain e-commerce platform.
“Its blockchain-backed technology helps ensure that sensitive information such as contract-specific pricing and negotiated rates are only shared between the buyer and seller.”
UPS went on to mention that their blockchain-powered platform will help B2B merchants in e-commerce, and will provide advantages over “businesses that use traditional methods for selling and advertising.”
3. First mover advantage
Cryptocurrencies hold the first-mover advantage in terms of digital payments within e-commerce — just like credit cards once held an incredible advantage over personal checks.
Back when credit cards were emerging, a few companies began using this method when it was still in its infancy.
One example is PizzaNet. They rolled the dice by using credit cards for online payments of pizza deliveries rather than cash at the door.
4. Possible Anonymity for buyers and sellers alike
Bitcoin and cryptocurrencies in general first made headlines because people were using them to buy and sell illegal items online.
Like it or not — this is still e-commerce. And legitimate e-commerce can take advantage of that by allowing their customers to buy perfectly legal items — but in an anonymous manner.
Perhaps a customer wishes to purchase a gift for their partner — and doesn’t want it showing up on the credit card statement. Or perhaps a business wants to sell items that customers might feel embarrassed purchasing.
Cryptocurrencies can provide an anonymous way of fulfilling such customer demands.
5. Helping eliminate fraud
Forbes published a fascinating article. They wrote that credit card fraud costs $190 billion U.S. annually.
Part of this figure is the fact that people who receive their item from an eCommerce store — then claim they never got it so that they can claim a chargeback and get their money returned.
They get the item for free, and the eCommerce store suffers.
Bitcoin, like almost all cryptocurrencies, does not allow such fraud to take place, because chargebacks are impossible.
Not only that but with smart contracts on Ethereum, once a condition has been met (the receiving of an item, for instance) then the crypto is released to the merchant and no chargebacks can happen. A win-win for both legitimate parties.
Bottom line: Cryptocurrency is a benefit to e-commerce.
Cryptocurrency provides a new environment for both sellers and buyers. They can cooperate more efficiently, feel safer, and save money.
As such, cryptocurrency has the potential to change the eCommerce — from the way items are sold to the way they’re delivered.
Video – Cryptocurrencies
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Interesting related article: “What is Blockchain?“