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Paying for coffee with crypto? Get ready, the future of payments is already here
CoinPayments | Jason Butcher | Nov 2, 2021
As the world emerges from a year or more of uncertainty to find it’s new normal, the aftershocks of the pandemic will leave some indelible marks particularly on the payments industry. Consumers that were forced to shop online triggered warp-speed developments in the eCommerce space, as merchants (big and small) jostled to convert shopping carts. Add to this a growing popular sentiment to protect personal wealth, the current evolution of the payments space seems almost obvious. As a long-time payments and blockchain entrepreneur, I believe that we have reached a watershed moment in the adoption of digital currencies, with new data proving that cryptocurrencies are increasingly part of our everyday transactions.
Crypto finally breaks into the mainstream
With large corporations, banks, governments, and retail investors alike holding crypto assets, digital money as an effective investment vehicle has been a reality on Wall Street – and in the public psyche – for a while. But, only recently are we seeing the real tipping point for mass adoption of crypto into the everyday lives of consumers, as it moves from purely an investment vehicle into the realm of value exchange. To everyday shoppers, crypto has now become a viable alternative to fiat currencies.
See: Updated FATF Virtual Asset and VASP Guidance includes DeFi for crypto service providers
Triggered by changing buying behaviours and escalated by pandemic-fuelled digital innovation, I believe this evolutionary tipping point in crypto adoption has been realized because people have the choice to pay with a wide array of cryptocurrencies and have the desire to exercise this choice. That’s why we’re seeing more merchants partnering with payments experts to enable crypto payments for customers, and this is empowering them to spend gains on real-world goods. From vacations and cars to professional services and groceries, consumers are being given the choice to step outside the more traditional payment methods, and this trend doesn’t seem to be losing steam, especially as more merchants jump on board.
In May, I participated in the FFCON21 panel entitled “Mainstream Adoption of Digital Currencies and Investing in Alternative Assets,” where I said that clear regulatory controls are required to maximize crypto adoption.
Consumers also have much to benefit from the greater transparency and control afforded by blockchain-enabled payments. Merchants also benefit from embracing crypto, avoiding higher fees associated with credit card payments (especially for cross-border transactions), and by gaining access to an entirely new, tech-savvy customer base. The immutability of the blockchain also helps merchants circumnavigate the rising challenge of so-called friendly fraud claims, as it eliminates chargebacks. Put simply, accepting crypto payments can help businesses of all sizes break down barriers to entry when it comes to securing profitable sales.
Our crypto data tells a compelling story
At CoinPayments.net, we are seeing a rise of crypto payments across industries, even with our eCommerce merchants. According to our data for the first half of 2021, overall merchant transaction volumes exploded by more than 200% to almost $3 billion year-on-year.
See: Payments without banks goes mainstream with Twitter on Bitcoin Lightning Network
Diving deeper into industry indicators, you can see rising consumer confidence in crypto payments as they are willing to spend more per purchase, with transaction sizes growing to $300 on average. In the last year, CoinPaymants has seen 10X transaction volume growth for Shopify merchants alone. These numbers would have been unheard of just three years ago as widespread adoption was in its infancy, and offer clear proof that people are using crypto for everyday transactions.
Regulation is the crypto final frontier
Despite the change being evident, it’s worth noting that this is not, by any means, universal yet. CoinPayments.net data also shows that some geographic regions are streaks ahead when it comes to mainstream adoption. Europe, for example, has a much more established crypto community, with higher levels of acceptance among businesses and readiness among consumers. Conversely, North America is only just getting off the blocks and has massive growth potential.
Why is Europe so ahead, you ask? To put it simply: regulation.
In May, I participated in the FFCON21 panel entitled “Mainstream Adoption of Digital Currencies and Investing in Alternative Assets,” where I said that clear regulatory controls are required to maximize crypto adoption. Some might argue that the notion of governance for the blockchain goes against the defining core of decentralization, but I strongly believe that regulation is the key to truly unlocking digital money for the masses. And, further, it is exactly this divide in opinion among industry players that is preventing us from achieving greater adoption through collaboration.
See: ‘Last year we saw about a 300% increase in transactions just using cryptocurrency’: Coinpayments CEO
By lacking transparency in our practices, it is us - industry leaders - who are going against the nature of the blockchain and holding it back. We are creating barriers to successful mainstream adoption of crypto.
Questions from regulators will undoubtedly make the industry ask questions of itself; which is only a positive thing as more conversation leads to greater education, awareness and, in turn, greater adoption. If industry leaders like CoinPayments can collaborate to help design the best path forward, the crypto industry can gain the credibility required to earn the trust of the consumers and businesses we are trying to reach; those that so evidently are ready to use digital money to exchange value.
Authored by:
Jason Butcher, CEO, CoinPayments (Linkedin)
Jason is an entrepreneur with nearly 3 decades of experience building global businesses across diverse industries and ever-changing financial markets. His daily role involves being an active player in a number of global Fintech, payment processing, crowdfunding and blockchain technology projects. His in-depth knowledge and experience from within the Fintech and payment processing industry have allowed him to hone the ability to accurately identify the different challenges from country to country to ensure all projects are successfully completed in line with compliance regulations. Jason is the CEO of the CoinPayments.net, the founder of HODLtech.eu, Parallel Payments, Clear Payments, and a board member and advisor for a number of payments, fintech businesses and associations such the Emerging Payments Association, the National Crowdfunding and Fintech Association (NCFA Canada) and many others.
This article is featured in NCFA's digital magazine, Fintech Confidential (Issue 4 Oct 2021). Click to read the latest thought leadership, insights and trends about Fintech in Canada:
Checkout NCFA's digital magazine, Fintech Confidential (Issue 4) --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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