Although general interest in cryptocurrencies continues to grow, the adoption rate remains relatively low so far. It is undeniable that the acceptance of cryptocurrencies for retail and commercial transactions will be one of the main drivers of their adoption and will allow their use to reach a critical threshold. In this context, one of the most important payment processors in the crypto market, BitPay, conducted a study to determine how consumers and merchants approach the use of cryptocurrencies as a means of payment, their pros and cons. This survey was conducted among 2,334 consumers and 202 merchants in collaboration with the company PYMNTS and his findings were revealed in a report entitled”Paying with Cryptocurrency: What Consumers and Merchants Expect from Digital Currencies”.
At the consumer level
The share of consumers who have held or currently hold cryptocurrencies increased from 16% in 2020 to 23% in 2021. About 30% of users who have crypto assets reserve them primarily for purchases, while 50% of them have acquired cryptocurrencies for investment purposes. However, with the current difficult context of the crypto market, which has affected the valuation of all assets, the impact on the investment level must be closely observed.
Bitcoin remains the most popular digital currency among users and was held by 12% of consumers surveyed. Ethereum is the second preferred digital currency among consumers: 6.8% of surveyed users claimed to own ETH at the time of the survey.
At the merchant level
High-revenue retailers are more likely to accept cryptocurrencies as a means of payment: In fact, 85% of businesses with more than $1 billion in annual revenue said they want to integrate cryptocurrencies to attract new customers. Only 23% of retailers with annual sales between $250 million and $1 billion accept cryptocurrencies for their purchases.
Most purchases of cryptocurrency are made with digital wallets, such as PayPal and Venmo. Only 23% say they accept payments through native crypto wallets (Coin base wallet or Crypto.com), which provides direct access to consumer funds. 95% of businesses that currently accept cryptocurrency as a payment method plan to innovate or expand their payment platforms and options.
One of the reasons why merchants use cryptocurrencies is the amount of fees: 70% of merchants indicated that one of the advantages of cryptocurrencies is a lower level of fees to process a transaction compared to other payment methods. Merchants typically pay around 1% to process crypto transactions, which is lower than the average 1.5% to 3.5% fees that processors charge for credit cards and other payment methods. Another reason given by a large percentage of merchants (81%) is the ability to eliminate middlemen. Some also mentioned the ease of processing and experience with cross-border transactions (59.6%). And finally, the interviewees also present the possibility of attracting new customers as a decisive factor in the integration of cryptocurrencies as a means of payment.
The Disadvantages of Cryptocurrencies
Despite all the advantages of cryptocurrencies, most merchants recognize that their adoption as a payment method and the development of their use will require them to overcome significant obstacles. Among merchants who refuse to integrate cryptocurrencies into their payment options, 68% cited the challenges of integrating wallets into existing infrastructure as a major factor behind their decision. 66% also mentioned the volatility of cryptocurrencies, and 56% mentioned problems tracking payments.
The number of consumers and merchants with exposure to cryptocurrencies is increasing. Each group learned to take advantage of the unique benefits that cryptoassets offer. Experience and training in the use and acceptance of cryptocurrencies as means of payment can thus open the way to a new stage in their growth.
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