It has been a year since the onset of the COVID-19 pandemic which has drastically warped how our world operates. In a bid to adapt to the changing landscape, countless industries have been shaken by national and regional policies to curb the spread of the virus. The entire payment industry — while not mandated by governmental polices — were forced to innovate as global shopping patterns shifted.
The virus had forced businesses to rethink their way to conduct business in a world where decreasing consumers leave their house to purchase daily necessities or shop in brick-and-mortar shops in large groups. In the blink of an eye, eCommerce is now the name of the game and digital payment acceptance dictates every merchant’s client reach.
Some believe that vaccines will be rolled out swiftly in the next year or two, putting an end to the crisis and reversing the changes in consumer shopping patterns. This fallacy was proven wrong by a World Economic Forum Report — COVID simply accelerated global shift to eCommerce by 5 years. This was further backed by the 2020 McKinsey Global Payments report, where reliance on cash as a transaction medium fell sharply.
“Overall, the crisis is compressing a half-decade’s worth of change into less than one year — and in areas that are typically slow to evolve: customer behavior, economic models, and payments operating models.”
- The 2020 McKinsey Global Payments Report
What should a business do to stay ahead of the rising tide in demand for digital payments? On the surface, credit and debit card acceptance seem to be the silver bullet. However, there are three main issues:
1. Limited Customer Reach — 1.7 billion adults in the world remains unbanked and many more do not own a credit card.
2. High Transaction Fees — Payment companies charges from 3–7 percent on total transaction value. For an eCommerce retailer dealing in low-margin and fast-moving consumer goods, this exorbitant fee could wipe out all gross profits.
3. Cash Flow — Cash flow is the lifeblood of all eCommerce businesses. Credit card payments are typically settled between 2 to 4 weeks (which can be dragged on far longer in cases of chargebacks, fraudulent reports etc.)
In view of these challenges, online retailers are turning to cryptocurrencies. Anyone with internet connection can own and send cryptocurrencies, even without a bank account. By accepting cryptocurrencies, the aforementioned challenges are effectively tackled. While there are concerns of volatility, online retailers can always turn to stablecoins — such as USDT (also known as Tether) — which is a cryptocurrency that is backed by real fiat currency reserves and stays stable in value.
If cryptocurrency acceptance seems daunting to you, fret not. Alchemy Pay provides a fuss-free way to accept both cryptocurrencies and mainstream fiat payments (credit cards and mobile wallets) through a single online payment gateway. Interested? Contact us at firstname.lastname@example.org and our friendly sales team will get back to you.