Merchant Crypto Payments: Clever Marketing or Signs of Real Adoption? Andrey Diyakonov is the Chief Commercial Officer of Choise.com. A MetaFi (CeFi/DeFi) ecosystem based on the Crypterium CeFi solution. The Charism DeFi protocol. Earlier this year. All the news about digital assets was about the ongoing crypto winter. The bankruptcy of creditors and other projects. Major black swans events like Axie Infinity’s Ronin bridge hack or the collapse of Terra’s UST algorithmic stablecoin.
Surprisingly, a significant change can be seen in recent months. Even though cryptocurrency prices remain near current market bottoms. There has been a fair amount of positive media coverage. About the industry recently. The reason for the latter is fairly straightforward. In the past few months, an increasing number of prominent businesses. Government agencies have started adopting digital assets for payments.
Accelerating business and state crypto adoption
In August, while Gucci expanded its list of supported digital assets with ApeCoin. Luxury resort chain Soneva began accepting major coins at its premises in the Maldives. Thailand, Oxford City integrated payments for the Crop Day match. Wala became the first non-league football club. Additionally. Businesses have expanded crypto payment coverage in Australia and Argentina. Citizens of the latter can now use a prepaid card brought about by a partnership between Binance. MasterCard to settle transactions with merchants via cryptocurrency. Meanwhile, Aussies can now buy fuel. Other merchandise with their digital assets at On the Run’s 175 premises.
At the same time, states are also increasingly realizing the potential use cases and benefits of crypto payments. Of course, central bank digital currencies (CBDCs) continue to play an important role in governments’ adoption of cryptocurrency, especially if we consider how close China is to launching its digital yuan (e-CNY). While visitors and residents can take advantage of e-CNY to buy subway tickets in Ningbo and Beijing, bus fares can be covered by the state-issued digital asset in Guangzhou.
Clever marketing or real signs of crypto adoption?
Big brands like Gucci, Balenciaga, and Tag Heuer joining the ranks of companies like Microsoft, PlayStation, AT&T, and Subway to embrace crypto is certainly good news for the industry. However, before we imagine Bitcoin (BTC) and other major cryptocurrencies “going to the moon,” we should consider whether this is indicative of a real-world, wave of adoption. Not stupid or just a marketing ploy by brands. Whether they like it or not, major companies are adopting cryptocurrency for payments to meet growing consumer demand. In the case of Gucci, the luxury brand decided to merge ApeCoin possibly because of its customers’ strong interest in the non-fungible tokens (NFTs) of the popular Board Ape Yacht Club (BAYC) project, where Eminem and Snoop Dogg Like top celebrities are active. Involved
Additionally, with an estimated 320 million crypto users worldwide, many users have realized the benefits of crypto payments. Compared to traditional forms of payment, digital asset transfers are cheaper and faster due to the lack of intermediaries in the transaction. At the same time, while users have direct ownership of their funds (provided they are not investing their private keys) with a non-custodial wallet, they do not need to use a bank account, credit card, or other services. To settle their payments to financial institutions.
For businesses, the benefits of crypto payments are even more obvious. Compared to traditional providers that typically charge between 1.5% and 3.5% to process credit card transactions, a recent report revealed that a qualified processor to accept digital assets. Businesses only cost about 1%. The savings in fees and speed of transactions give merchants the best opportunity to reduce their bottom line. Additionally, while they can target crypto-local prospects more effectively, they face significantly lower risks of unfriendly behavior. Fake chargebacks, with transactions powered by digital assets.
Who will take the lead in crypto adoption?
In the coming months, I expect more luxury brands, especially those actively involved in the NFT and Metaverse sectors, to follow Gucci’s footsteps and embrace crypto payments. Also, as demand among merchants grows, major payment institutions like MasterCard, Visa, and PayPal will likely introduce new or expand their existing digital asset offerings to meet enterprise demand. Will give another reason.
At the same time, as upcoming metaverses from tech firms such as Meta and Microsoft move a step closer to their launch, we may also see a surge in crypto adoption in the field, where assets are said to be a form of payment. Can be used as a source. in the virtual world. Now, it remains to be seen whether and how these new efforts will be future-proofed and counter-regulated. Meta still hasn’t fully recovered from Libra’s blowback. How decentralized and peer-to-peer (P2P) those infrastructures are is another uncertainty.
Next year, we may also see some new government initiatives aimed at leveraging the benefits of crypto payments spread across continents, from Iran through African states to Argentina’s Mendoza province. However, I believe that all those efforts will be slowed down by the attention that could be diverted to CBDC development. For this reason, I expect businesses to be at the forefront of adopting crypto payments for the next few months – or at least until China completes the nationwide launch of the digital yuan, allowing millions of ways to be opened for new crypto users.