Different factors are shaping the financial landscape. Among which is the advent of Cryptocurrencies. The term comes from the root, crypto, which is defined as a secret. The word currency is defined as a system of money for a region or country. Most government authorities refer to Cryptocurrencies as virtual currency or digital currency. Though the terms, Cryptocurrencies and digital currency may look similar. However, they are actually different.
Cryptocurrency and eCommerce
eCommerce is one example where Cryptocurrencies provide a solution to a vulnerability in the sales transaction. eCommerce is experiencing significant growth because the right structure exists to support it.
There are advantages to having eCommerce, such as having flexible buying hours, and you can shop at home (which means they are open 24/7, especially during times of social distancing and needing to stay at home because of the pandemic).
There are also disadvantages for both retailers and consumers alike. One such drawback is there is more risk for the customer. Data theft and identity theft are just some of the threats consumers face in an online transaction.
There is the risk of receiving low-quality products delivered to you, compared to what was posted on the site. There is also the risk of experiencing fraud where a sales transaction has been made with a fake supplier or retailer, and no product was ever delivered.
For the retailer, there is also the disadvantage of having higher logistical costs because they will still have to deliver the orders of their customers. It’s risky when you are unfamiliar with your market because of customer anonymity. You need to focus on how to properly advertise to the right target market to avoid bogus buyers and the like.
Our Buying Habits have Changed
Times have changed, and so did our buying habits have changed. People can now order anything by clicking the keyboard of any of your devices. There are now software applications that function to help make it easy for consumers to make payments. But the internet is not a secure environment. When people make payments online, there is a need to make a secure transaction. Cryptocurrency can provide a secure sales transaction.
Platforms, like Android and iOS, support transactions using Cryptocurrency. With eCommerce and blockchain application technology, we have an understanding of the use of different eCommerce platforms available today.
Cryptocurrency provides security and anonymity for a regular shopper and to the retailer. It is where Cryptocurrency is different from digital currency. When you make an online payment using Paypal, you will need to have a bank account connected to that Paypal account. It means that you would still need the bank’s approval to make online transactions and pay an additional minimum fee for the transfer.
With Cryptocurrency, you are the master of the transaction having complete control over the amounts that are being charged or paid. Cryptocurrencies do not require the authorization of any bank institution or bound by geological currencies.
It is so nice that a consumer does not have to reveal information like your location or your bank information details to purchase by using Cryptocurrencies. But there are also disadvantages to using Cryptocurrencies in eCommerce.
One disadvantage is that these currencies are volatile, and their value fluctuates erratically at any time. The value of this currency may rapidly change beyond one’s expectations. The algorithm that predicts the value of it is said not always to be accurate.
Another disadvantage related to Cryptocurrencies is based on the drastic moves that national governments have made about Cryptocurrencies. It makes it a difficult situation for retailers and online merchants. Online merchants would have to be prepared for losses in case the value fluctuates against them.
A lot of people today have Cryptocurrencies in their digital wallets, but they don’t have enough places to spend them. It is a vast market that has the potential for excellent yield. By providing an option to pay with Cryptocurrencies, one can likely reach out to a new customer base.
Many consumers do have Cryptocurrencies in their digital wallets. That is a market that has a lot of money but has a limited area to spend the money on. Payment with Cryptocurrencies opens unlikely doors for eCommerce because it would reach a new customer base. If the consumer were willing to take the risk in exchange for the convenience and advantages of using Cryptocurrencies, online retailers and suppliers would be in an advantageous situation. It would lead to less security risk for the consumer and less processing and transaction costs for the retailer. In all these technologies we employ alongside our eCommerce business, we need to build trust today with our customers for tomorrow’s digital economy.
Ramon has been writing about technology trends, entertainment, and gaming ever since he left the busy world of corporate HR Tech behind. He currently writes about software and user experiences for Softvire Australia - the leading software e-Commerce company in Australia and Softvire New Zealand. In his spare time, Ramon writes science fiction, collects little yellow men and plastic spaceships.
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