There’s no denying that cryptocurrency has a massive impact on the world. It’s disrupting industries, changing consumer behaviours and forcing many institutions to rethink their strategies as they look for new ways to attract clients. Many companies stored their cash reserves in cryptocurrency during the pandemic as they believed currencies like Bitcoin were a safe bet amid economic uncertainty.
However, as cryptocurrency continues to develop and mature, some limitations still hold back mass adoption. For most businesses, crypto payments still aren’t an option — but companies like Ripple are working hard to change that.
What is a cryptocurrency?
A cryptocurrency is a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of its inherent security centred design. A defining feature of cryptocurrency, and arguably its most endearing allure, is its organic nature – it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.
What is blockchain?
Blockchain is the technology that underpins Bitcoin and many other cryptocurrencies, but it has other uses too. Information is stored in chunks or “blocks,” linked to previous blocks, creating subsequent chains on a blockchain. Each block contains information about the transaction and a link to the next block. Blockchain can verify authenticity, validity, and past transactions. But it’s not an “on/off” switch. Blockchain transactions are still encrypted and remain stored on each node or computer.
Why should you accept Crypto payments?
The cryptocurrency environment has several advantages over traditional banking systems, such as:
1) decentralised, as in not owned by any single person or government – it’s a democratisation of money management.
2) fast, meaning that transactions are confirmed and added to the blockchain within minutes, removing the need for third parties.
3) secure, as it is a shared database that cannot be changed unless the majority of users decide to do so. It’s also fraud-resistant as users can store, access, and secure data only from institutions with the appropriate credentials.
4) economical, especially for cross-border payments, as it considerably reduces banking costs due to all transactions taking place digitally and fast.
However, businesses considering accepting crypto payments should also note that digital currency comes with high volatility and pricing fluctuations which, although compelling to traders, are adding a layer of uncertainty for businesses. The FCA also commented on the issue earlier this year, warning businesses and consumers alike of the perils of this new type of currency.
How to adopt crypto payments for your business?
If your business wants to accept crypto payments and blockchain payments, it’s essential to adopt a suitable payments platform to help minimise implementation risk and easily facilitate transactions in the most popular crypto payments currencies, like Bitcoin, Ethereum and Ripple.
An out-of-the-box payments platform would facilitate a transparent and straightforward merchant application process that allows fast acceptance decisions for high-risk merchants. In addition to providing the basics for smooth payments implementation like bitcoin wallets, it can also offer unique customer insights into this emerging vertical.
A Crypto-inspired finance revolution
A few companies are leading the way in this vertical, with Ripple being one of them. Before anything else, Ripple is a cryptocurrency and a platform designed to allow fast and cheap transactions – RippleNet. RippleNet uses solutions intended to provide a frictionless experience of sending money globally through a network of institutional payment providers such as banks and money services businesses.
Similarly, Token allows real-time account-to-account (A2A) payments straight from apps and websites – this is the simplest way to bypass traditional methods. Token is also moving beyond conventional open banking integrations to secure one-click transactions without the need for authentication.
All in all, we believe that digital currencies encourage more financial inclusivity, and cryptocurrencies are levelling the playing field by creating more opportunities for businesses in the financial services space.
While there are still some risks of accepting crypto payments, such as different technical barriers, volatility and regulatory uncertainty – it’s clear this is more an opportunity than a threat. Even the Bank of England seized the potential of digital currencies by creating RSCoin, which is a nod in the right direction for this emerging trend.