What SMBs Need to Know About Accepting Crypto

Back in October — in what appears a lifetime in the past within the cryptocurrency world — PYMNTS and BitPay’s “Shopping With Cryptocurrency” research discovered that “tech-driven” customers, representing roughly 15% of all customers and 22% of previous or current cryptocurrency holders, are the most definitely to transact with it.

But now, as FTX hauls itself out of business courtroom, different crypto exchanges shudder and bitcoin hovers at $16,000, retailers should ask an existential query: Do I settle for crypto, or not?

It may make sense that as bitcoin and its brethren are unstable, customers might maintain off on utilizing their holdings to purchase items and companies. The buying energy of these digital cash fluctuates day to day, hour to hour. It additionally may make sense that retailers can be apprehensive that they may not see their cash when customers do transact (FTX’s ripple results embody issues over governance and frozen funds).

But BitPay CEO Stephen Pair and Nick Dossa, supplier principal at Vegas Auto Gallery, which processes crypto transactions via BitPay’s platform, instructed PYMNTS that the FTX fiasco has not, in reality, modified issues a lot in any respect. Viewed via the broader lens of historical past, the FTX shakeout is nothing new.

“We’ve been via quite a lot of occasions like this within the final decade,” remarked Pair.

Bitcoin fee service supplier BitPay made the long-ago determination to reduce dependency on exterior corporations.

“We custody our personal crypto, and we don’t depend on third events for that,” Pair mentioned.

When exchanges are used, Pair mentioned his agency strikes crypto onto the exchanges, sells it and withdraws the proceeds immediately.

Mixed Consumer Sentiment — for Now

Yes, there may be some uncertainty amongst customers out there, Dossa mentioned, and other people could also be ready a bit to see how issues shake out. But for Vegas Auto Gallery, which sells luxurious and unique autos and has provided bitcoin as a fee possibility since 2015, “the folks that have a number of crypto are nonetheless shifting ahead” and transacting.

Pair echoed that statement, noting that totally different folks got here to crypto at totally different occasions — and there are nonetheless a number of individuals who invested years in the past sitting on wholesome positive aspects — or they could have transformed their bitcoin into stablecoins (BitPay additionally helps USDC) and are utilizing these cash to make purchases.

Coming into the vacation season, there could also be some bifurcation amongst crypto-holding customers.

“You’ll see some people who find themselves of the ‘spend it or lose it’ mentality,” mentioned Pair.

But there are different customers who need to spend when bitcoin’s worth is excessive, and when it’s low, properly, that’s a great time to save and construct wealth.

Upside for Merchants

The present-day headwinds however, mentioned Pair and Dossa, retailers must be drawn to the truth that crypto holders are youthful, tech savvy and have a tendency to be comparatively extra prosperous than different demographics. Pair famous that even in these considerably constrained occasions, the typical spend throughout BitPay’s service provider clients tracks at two occasions what a typical buyer wielding a bank card spends.

There’s one other profit that accrues to the retailers.

“If they discover a place the place they’ll spend crypto, they’re going to inform their mates,” Dossa mentioned.

Looking forward over the following few months and over the long term, the chaos sown by FTX may have the salubrious impact of flushing unhealthy actors out of the system, providing a wake-up name for buyers and regulators. The nice deleveraging might have begun, predicted Pair, and “we’ll discover a footing and a ground within the markets. And then we are going to begin constructing once more.”

As he instructed PYMNTS, amid the rebuilding, “many retailers ought to contemplate accepting crypto. They’ll be pleasantly stunned by the sorts of consumers they entice.”

For all PYMNTS crypto protection, subscribe to the each day Crypto Newsletter.

How Consumers Pay Online With Stored Credentials
Convenience drives some customers to retailer their fee credentials with retailers, whereas safety issues give different clients pause. For “How We Pay Digitally: Stored Credentials Edition,” a collaboration with Amazon Web Services, PYMNTS surveyed 2,102 U.S. customers to analyze customers’ dilemma and reveal how retailers can win over holdouts.


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About the Author: Daniel