Unless you’ve spent the last few years living under a rock, you’ve undoubtedly heard the words cryptocurrency, blockchain and Bitcoin in financial and trade news. Even if you don’t have a developed understanding of the concept, it’s almost impossible to miss the countless conflicting accounts of how it’s either the future of retail – or a risky waste of time.

As you might expect, the answer isn’t cut and dried and there are still some issues that need to be addressed before we can know for sure how successful the crypto revolution will be in the long term. That said, there are still some ways that retail/retail business owners like you can dip a proverbial toe into the water and investigate why you might want to consider making the switch to cryptocurrency (or at least including it in your payment options).

So, what is it?

The main idea of a cryptocurrency is as a digital asset used for financial transactions. It’s  secure and unreadable by third parties trying to access the transmission. Blockchain uses unique keys generated and distributed to encrypt and decrypt data. These keys or encrypting system are generated for the sender and the receiver but the keys are destroyed after their purpose is served (unlike say a credit card details which remain the same after a transaction and have the potential to be harvested in a hack).

The usage of cryptocurrency is becoming more popular because of its security and reliability. It’s a decentralised digital currency that is transferred between peers without a single centralized financial institution (ie: bank) handling it. Whether you think that’s a good thing or not is the kind of argument people have had for the vast majority of human history with the introduction of ‘new things’ – the metric system caused all sorts of grief as did GST when it was introduced. But from a purely economic perspective, it certainly seems to work.

What can it do for retail?

Cryptocurrency can be considered as an added method for payment along with the other payment gateway you use. It can expand your clientele, particularly in overseas locations and those in the know, say it’s easier to use than paper money or internet payment gateway.

Benefits of cryptocurrency

  • The most beneficial aspect of using cryptocurrency is that the transactions are irreversible. Every eCommerce business fears the loss they face due to chargebacks due to eCommerce fraud or otherwise while making payments with credit cards. Chargebacks can cause major dents in the finances of the eCommerce business. With irreversible transactions of cryptocurrency, this issue is solved for good.
  • There is no paperwork or id required to own cryptocurrency. People of any age can use it. This increases your clients as anyone from anywhere can use it to make a purchase.
  • Since it is decentralized and does not involve a financial institution or handler, there are no charges that the sender or the receiver has to pay to handle the transactions.
  • Although the currency was considered unreliable initially and it did see sharp ups and downs, but more recently it seems to be stabilising.
  • Cryptocurrency is a very secure and transparent transaction process. The chances of hacking, loss, and fraud are considerably less when compared to other payment modes. Such transparency makes it almost impossible to do any monetary or data corruption.

Drawbacks of cryptocurrency to consider:

Now that we have discussed the benefits of cryptocurrency, there are also some drawbacks to consider. Although, it should be said, these issues are mostly minor and being worked through as the technology progresses,. But until these issues are solved, you might want to keep them in mind.

  • Even after so much popularity, there are some countries that still consider it illegal tender ie: Costa Rica. Even the ATO, who recognise it as a financial asset class, are still trying to come to grips with how to get their chunk of it. So make sure you know about any markets you are planning to target.
  • The recent crash in the cryptocurrency market has shaken the reliability and trust of the consumer. Although it has become more stable be on the lookout for future predictions for it. The last thing you want is for the currency to drop by 30% which is what happened in 2017/18.
  • The anonymity and ambiguity that comes along with concept is a two-sided coin. It helps the transaction be quick and easy but can also be a cause for concern as you don’t know the authenticity of the source or if it comes from the illegal (think terrorism or criminal money laundering source).
  • Processing the transaction can take a bit of time. Not so much as to hinder the process but it shouldn’t be overlooked.

Additionally, it should be noted that even though you’ve been hearing about it for years now, cryptocurrency is new. When something as potentially world-changing as this heads front and centre, legislation and regulation surrounding it is likely to change rapidly, so you need to be on the lookout for changes that might impact your business and the actual market value of your chosen currency.

But if you play your cards right, these next few years could see your business benefiting greatly from getting ahead with crypto-payments.

Whatever you decide is right for your business, we’d be delighted to help you with the next step – getting your products to your customers! You can always give us a call on +61 2 9828 0111 (Sydney), +61 3 9240 6300 (Melbourne) or +64 9 263 8855 (Auckland) or drop us a note via the form below. Alternatively, you can find a full list of available services here.

 

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