SHOULD E-COMMERCE BUSINESSES ACCEPT CRYPTOCURRENCIES?

Cryptocurrencies have gained their popularity and become hot topics since last year. Built on blockchain technology which is said to redefine the fourth industrial revolution, cryptocurrencies have raised a big question to many e-commerce businesses – “Should we adopt cryptocurrencies as a payment method?”.

With the vision “Face the future”, Qreer has a great passion for new technologies and understands the urge of digitalization where customers can make their payment instantly irrespective of borders or currencies.

Let’s dive into this topic to know more about the cryptocurrencies.

So what exactly are cryptocurrencies?

A cryptocurrency is a digital currency which is built based on blockchain technology, a public transaction database that anyone can use with an internet connection; this database is decentralized, meaning it is not owned by any central authority such as governments or banks. In addition, the database is looked after by a peer-to-peer network, making it highly secured and cheating the system is nearly impossible. Bitcoin is the world first and most widely known digital currency which can be sent freely among people and blockchain comes into to verify the ownership of each coin at one time. Below is an illustration of a blockchain process.

Who have adopted cryptocurrencies?

Seeing benefits from this digital currency, many companies, large and small, are accepting cryptocurrencies. Since 2014, the super market located in Arnhem, The Netherlands has become the world’s first super market accepting Bitcoin. Big players like Microsoft, eBay, Paypal have enabled their customers to pay in Bitcoin and other digital currencies. At a higher level, The Swiss government is accepting Bitcoin for tax payment in 2018 and Dubai, the city of the future, aspires to become the world’s first blockchain-powered government. More and more industries such as food, travel or e-giftcard are accepting Bitcoin.

Why should companies enable their customers to pay by cryptocurrencies on their websites?

There are various motivations to embrace cryptocurrency payment.

Increase in new customer traffic: Nearly thirty percent of millennial will own cryptocurrencies by the end of 2018 and these currencies will remain popular in the future. Consumers who are passionate about cryptocurrencies want to spend them, thus, becoming a digital-currency-accepted merchant will attract these audiences.
Minimization in cost and processing time: With no middleman, payment by cryptocurrencies can take place at near-instant speed. Moreover, there are no currency exchange and processing fees which greatly benefit international transaction and make it much faster. This fact, as a result, leads to better control over cash flow and avoid the problem of waiting to get paid.
Improvement in security: Transactions using cryptocurrencies are secured by the multi-level encryption which can identify theft better than credit cards or bank transfer.

What risks should e-commerce businesses consider when adopting cryptocurrencies?

On the flip side, the digital currencies have some disadvantages.

As cryptocurrencies are virtual and do not have a central store, a computer crash can destroy a crypto currency balance if there is no backup copy of the equity.
Since prices of crypto currencies are based on supply and demand, the exchange rate of cryptocurrencies to other currencies can fluctuate sharply. An instant drop can make the merchant lose money even when the digital currency is exchanged immediately after the payment.
Cryptocurrencies, as a digital technology, are not resistant to the threat of hacking and could fall into the hands of hackers. Recently, the biggest crypto hack took place in a Japanese cryptocurrency exchange with the loss of more than $500 million (Cheng, 2018).
The new currencies still lack established regulations in many countries and are often misunderstood by law makers. Furthermore, due to its decentralized characteristic some governments may attempt to terminate or regulate the technology.

How to accept cryptocurrency payment on a website?

There are certain steps to take to accept digital currencies for your business:

Firstly, you need to select a third-party company who provides a platform for cryptocurrency integration and exchange such as Bitpay, Coinbase or CoinPayments.
Next you create an account in the provider’s website and set up a merchant digital wallet.
After setting up the digital wallet, you select the digital currencies you want to accept.
In the next step you integrate the information received from the provider into your POS system or online shopping cart.
Finally, you need to make transactions accounting-friendly by integrate them into your accounting system. From now on the cryptocurrency payment will automatically be converted into your chosen currency and sent to your bank account.

Although the digital currencies have gained their popularity in some industries such as food, travel, non-profit and video game, the technology is not yet applied in the recruitment industry. Facing the future, Qreer is always on top of investigating the interest and value of applying the cryptocurrency payment method on Qreer website.

As a key player in the hiring business, will you take the competitive advantage of the first mover?

Bibliography

Cheng, E. (2018, January 29). CNBC. Retrieved from https://www.cnbc.com/2018/01/26/japanese-cryptocurrency-exchange-loses-more-than-500-million-to-hackers.html

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