Plotting a course to consumer adoption of cryptocurrencies
Are we only 12 months away from the majority of businesses offering crypto in their online checkout?
The growth of cryptocurrencies has again been one of the dominant narratives defining the past 12 months in financial services. But in previous years we have often spoken about the growing enthusiasm for crypto and the accumulation of crypto assets as investments without demonstrating where crypto is making an impact on the everyday lives of consumers. That is because there has often been less certainty is real-world use cases for crypto and, most notably, we haven’t seen cryptocurrencies make much progress in the consumer payments space.
2022 is the year this looks set to radically change.
The acceleration of consumer demand for crypto payments
Primarily, this shift is being driven by a surge in demand from consumers. In October, Paysafe commissioned an independent research report into the crypto community, to find out more about why people already own crypto and their vision for the future of finance. One of the key themes coming from the research is the extent that people have switched from acquiring crypto as an investment to acquiring crypto because they believe it is in the future of finance. In fact, 33% of crypto owners already say that crypto is the future of payments, and 21% say they want to make all their payments in the future using crypto.
Businesses have already locked onto this demand to make crypto payments, and are making plans to introduce crypto into their checkouts. To find out more, in our latest business research report Lost in Transaction: Finding competitive advantage at the checkout, we asked 900 online businesses from eight countries around the globe to tell us about their plans to introduce cryptocurrencies into their checkouts.
According to our research, 17% of businesses say they do already allow consumers to pay via crypto in some form, and a further 36% plan to introduce crypto into their checkout the next 12 months. If all these businesses do succeed on that ambition then more than half of all businesses will be offering crypto payments by this time next year. When we asked all businesses about their plan to integrate crypto into their online checkout only 15% said that they don’t see the need to ever offer crypto.
The need to futureproof
Businesses want to do this as soon as possible because they see a need to futureproof their survival and growth. 59% of businesses believe that offering crypto payments will help them to expand into new markets and 52% are worried that they will lose customers in the future if they do not let them pay with crypto. And more than half (54%) of businesses already believe that cryptocurrencies are the future of payments.
Overcoming integration issues
But is it that simple? Is it realistic for businesses to commit to adopting crypto payments at pace in the next 12 months? Adding crypto into the checkout isn’t an easy process; integrating any new payment method is never straightforward if not done through an existing partnership with a payments provider and there are specific issues relating to crypto that make this even more problematic.
These include the number of cryptocurrencies available which is constantly increasing, the volatility of the value of crypto, and anti-money laundering (AML) and Know Your Customer (KYC) concerns where crypto consumers are not identifiable.
So integrating crypto in the short term is possible, but only through working with payments partners that have cryptocurrencies in their available payments offerings and the capabilities to offer multiple alternative payments methods through a single API gateway. Businesses must also partner with payments companies that that are best placed to overcome the unique issues crypto will pose.
Trying to integrate new payments methods into the online checkout via a separate integration or by creating a new relationship with a new payments partner is complicated at the best of times; with a relatively unknown field such as cryptocurrencies the issues could spiral. If integrating cryptos as quickly and cost-efficiently as possible is key to an online business’ payments strategy in 2022, this is not the optimum solution.
But nearly half (48%) of businesses say they are committed to offering crypto payments in their online checkout as quickly as possible. And that timeline is apparently short. This means that the payments landscape could look extremely different this time next year if the majority of businesses meet their commitment and are offering crypto in their online checkout.
And many are even looking beyond this milestone already. In fact, more than a third (37%) of businesses are already considering only offering crypto payments, which would be even more transformational for the payments ecosystem.