There is no way you can overlook the growth and popularity of eCommerce. Billions of people across the globe buy myriads of things and services online nowadays. This is largely owing to the numerous conveniences associated with online shopping.
The lucrative promotions and offers doled out by the eCommerce giants are also responsible for this spectacular growth. In 2019, total sales generated by eCommerce were a whopping $3.53 trillion, and by 2022 this figure is expected to touch $5.69 trillion. The digital marketplace growth is significant, and with it, the online payment methods are also evolving.
Advantages of using crypto payments in eCommerce
For a long time, people buying things online relied exclusively on payment modes like debit and credit cards and net banking. In modern times, the use and popularity of digital wallets have grown. However, these digital payment methods do come with their share of drawbacks. Instances of debit and debit card fraud are numerous, and people have lost a significant amount of money owing to such mishaps while shopping online or looking for offers. Digital wallets such as Payscript are faster and easier to use, and more online buyers to look for a viable digital alternative payment method. Cryptocurrencies may fill in the gap, as per the industry experts.
There are reasons for which Cryptocurrencies may become the choice for eCommerce transactions. These are:
Cryptocurrencies like ethereum and Bitcoin are decentralized in nature, and so the users can make large transactions without relying on any bank.
The security offered by Blockchain technology, on which Cryptocurrencies operate, is more or less immune to digital payment frauds.
With time, more eCommerce merchants and brands are offering support for major Cryptocurrencies.
By paying through Cryptocurrencies, the buyers can evade processing fees required when paying via credit cards.
Reasons behind sluggish adoption of Cryptocurrencies in eCommerce
The Cryptocurrencies like Bitcoin have been on the scene for several years, but the adoption was slow, especially for mass use and online shopping. There are reasons behind its slow adoption.The first reason behind the lack of mass interest in using Cryptocurrencies for online shopping is the lack of a regulated operating environment—banks and NBFCs issue credit cards, debit cards, and wallets. So, the users know where to lodge grievances if an online transaction goes haywire while using these means. With Cryptocurrencies, there is no regulatory authority or bank. This risk element has deterred a majority of online shoppers from using this option.
Till now, several popular online merchants have not offered support for Cryptocurrencies. The scene is slowly changing, though.
The major banking giants have been hesitant about offering support for Cryptocurrencies.
Using Cryptocurrencies is still not permissible in the eyes of the government in some countries.
Why 2021 and subsequent years may see increasing use of Cryptocurrencies in the eCommerce sector
The year 2020 has turned out to be significant for every sector, including eCommerce. The COVID19 pandemic gave a massive jolt to the industry, bringing the operation to a halt for a limited period. However, the eCommerce sector proved to be the saviour for billions of people compelled to stay at home during the global lockdown induced by the pandemic. With cash being deemed risky, the usage of digital transactions shot up in 2020- in a drastic way. This also helped in putting the focus on Cryptocurrencies as a viable alternative method for making payments digitally.
The latest developments are likely to boost the usage of Cryptocurrencies in the eCommerce sector.The shadow of pandemic still looms large globally, despite the progress in making vaccines and lower infection rate, etc. Millions of people are still working from home, and many establishments are shut worldwide. So, the growth of eCommerce seems logical. In such a situation, using Cryptocurrencies comes across as a logical choice for people wary of using cash and conventional digital payment means. For a majority of people, cost-cutting is a way to survive in the post-pandemic phase. The instances of people losing their jobs and coping with pay cuts are aplenty. So, online shoppers are looking for all means to cut down costs-especially those who buy plenty of stuff online. It makes sense to use a digital transaction method that involves minimal or no transition fees and does not involve any intermediaries. That is where Cryptocurrencies fit in well.
Nowadays, a lot of people buy stuff online using their mobile devices instead of PCs. The reasons are mobility and faster execution. The reality is both Android and iOS support cryptocurrency transactions. In fact, you can buy specially built Blockchain smartphones that offer superb data security and come with embedded crypto wallets. With the percentage of people buying online through mobiles growing, it is feasible that crypto payments in the eCommerce sector will grow.
The number of people considering Cryptocurrencies like Bitcoin as a virtual and alternative asset for investment is growing. These investors with deep wallets are moving away from traditional assets like land and gold, and some MNCs are also doing the same. Once they experience the inherent benefits of Cryptocurrencies, including security and anonymity, it is likely they will use them for buying things and services online.
The attitude of leading NBFCs and banking entities towards Cryptocurrencies is changing with time. Some of the global banks are also dabbling with making their own Cryptocurrencies. With such financial intuitions warming up to the crypto sector, the mind-set of the users is likely to change in the near future.
The variant stablecoins may resolve the issue of the volatility of Cryptocurrencies. These are cryptocurrencies whose value is linked to assets like gold and fossil fuel. Once the eCommerce giants start supporting stablecoins, the buyers may be more inclined to use this as the payment mode over fiat currency.
Summing it up
It may take some time before usage of Cryptocurrencies in the eCommerce sector shoots up, opine the financial experts. Once the major eCommerce players sport support for such virtual currencies and crypto wallets, the others are expected to follow suit. The regulatory hurdles need to be cleared as well.