The following is a guest post and opinion of Vitaliy Shtyrkin, Chief Product Officer at B2BINPAY.
Nowadays, businesses face a dilemma: while cryptocurrencies have several benefits, including lower fees, faster transactions, and global accessibility, they also pose such risks as uncontrolled volatility and security concerns — both of which remain critical for consumers. This is confirmed by the research published in the middle of 2022, which shows that 50.6% of online shoppers view cryptocurrency as the future of payments, while the latest survey of 4000 people in the United States demonstrates that less than 1% identify crypto as their preferred online payment method.
In this context, key questions emerge: Should e-commerce businesses really integrate cryptocurrency as a payment solution, or is it just another passing trend? Could stablecoins offer a more reliable path forward? Let’s break this down and explore the primary things e-commerce businesses should consider regarding crypto adoption.
The place cryptocurrency takes in today’s e-commerce
There are some platforms which utilize digital assets as the means for payments. We can see by a recent study that the e-commerce and retail sector has the highest number of companies offering crypto payments, totaling 76 businesses that successfully leverage this technology. In fact, the integration of cryptocurrencies into business processes is already noticeable, though it’s not yet mainstream, which indicates that crypto adoption in e-commerce is only in its early stages.
Although the adoption of cryptocurrencies by e-commerce businesses is only emerging, companies with a global customer base have already started to reap the benefits of crypto transactions. Still, it primarily refers to large-scale companies, as 85% of them, making over $1 billion yearly, are already accepting cryptocurrencies.
Conversely, as for mid-sized retailers, which make from $250 million to $1 billion, only 23% have adopted crypto payments. Anyway, they easily accept payments from international customers without the need to deal with exchange rates, long transaction processing, and high fees, unlike traditional payment methods.
For instance, one of the e-commerce platforms, Shopify, actively integrates crypto payments and allows merchants to accept digital transactions from customers worldwide via global payment gateways. And given the positive sentiments of governments lately, such cases are only expected to increase.
Nonetheless, there are some challenges businesses have to face — the value of some cryptocurrencies can fluctuate significantly over short periods of time, which is a major concern for merchants due to the inability to establish a stable pricing policy. In this regard, stablecoins can be considered as a way out for companies in the e-commerce sector.
Stablecoins — the most viable option for e-commerce?
Stablecoins are among the best choices for e-commerce companies to adopt because they both preserve the benefits of crypto payments and offset volatility risks. Apart from risk mitigation, stablecoins are also more transparent and secure to the public eye, which increases trust. For example, Circle, the issuer of USDC, is obliged to provide monthly attestation reports performed by independent accounting firms, which enhances users’ confidence in its transparency.
The potential for widespread adoption is also dictated by ongoing regulatory revisions, which play a significant role in establishing clear guidelines. For instance, recently, the U.S. House of Representatives presented an updated version of the STABLE Act, substantially revising the draft from the previous month.
The new version aims to support stablecoins by introducing new compliance mechanisms, extending regulatory oversight, and possibly creating a federal framework for payment stablecoin issuance. So, as regulations take shape, e-commerce companies may become the first to offer stablecoins as a means of payment to stay ahead of the market, and it could significantly impact the sector’s growth and attract considerable attention.
Other than that, stablecoins can be integrated within existing payment services — for example, PayPal has already begun to adopt cryptocurrencies as a part of its services, and we most probably will not have to wait long for others to follow the trend. It is mainly because businesses shouldn’t rebuild their payment infrastructure to successfully implement stablecoins — quite easy to do. Additionally, by using stablecoins through such robust platforms with advanced cybersecurity mechanisms, businesses could reduce risks and prevent fraud.
Finally, stablecoins can open access to new markets for consumers in regions with limited banking infrastructure. In 2021, in its briefing, the European Parliament underscored that stablecoins may positively impact global trade, facilitate the development of global payment arrangements, and enhance financial inclusion both in developed and developing countries. Hence, this confirms that adoption of stablecoins by e-commerce businesses could play a crucial role in expanding their reach.
Bottom Line
The integration of crypto payments in e-commerce shouldn’t be seen as a trend pursuit, but rather as a strategic move that may transform digital trading. We can expect that within 5–10 years, stablecoins could become a standard for cross-border payments and change the way businesses and consumers engage in digital transactions.
Stablecoins, being consistent and asset-backed, offer businesses protection from excessive volatility, seamless integration with existing payment services and expansion in regions with limited financial infrastructure. However, companies should consider robust security mechanisms, transaction management, and adherence to regulatory compliance to leverage this payment method effectively.
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