Cryptocurrency payments have traditionally suffered from a pervasive “cold start” problem.
Among other issues hindering the integration of blockchain-based digital assets as a payment mechanism, many potential customers simply do not own the cryptocurrency and are therefore unable to use it to carry out transactions. you can't.
And that is no incentive for merchants to adopt cryptocurrency payments as a service.
However, following the news last Thursday (April 25th) that Stripe is re-entering the crypto payments space after a six-year hiatus, the adoption of cryptocurrencies as a primary payment mechanism is becoming increasingly popular across industries. This has become a top concern for companies and franchisees.
“Cryptocurrency is back,” Stripe president and co-founder John Collison told the company. keynote The title is “The Future of Payments.”
“We are excited to announce that we are bringing back cryptocurrencies as a way to accept payments, but this time with a better experience,” he said, adding that Stripe will launch a global platform this summer that can process transactions instantly. We explained that we will start supporting tablecoin payments. Settled on-chain and automatically converted to fiat currency.
Stripe's total payments volume will exceed $1 trillion in 2023, and the company's re-entry into the cryptocurrency payments market highlights new possibilities for broader acceptance and integration of digital currencies in the payments industry may be considered as such. By focusing on stablecoins like USDC, Stripe aims to reduce the volatility risks associated with cryptocurrencies and address one of the key barriers to adopting cryptocurrencies as a payment mechanism. I am.
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Make transactions more efficient, secure and inclusive
Stripe was one of the first major payment providers to introduce early support for Bitcoin in 2014, and stopped offering the cryptocurrency just four years later in 2018.
In discontinuing support, the company noted that it has increased transaction confirmation times, increased failure rates, very high transaction fees and are typically as expensive as bank wire transfers, and associated concerns for both Stripe and retail customers. He cited technical factors such as a decline in demand for
But now, “cryptocurrencies are finding real utility,” Stripe's Collison said in his keynote. “With increased transaction speeds and lower costs, cryptocurrencies are finally making sense as a medium of exchange.”
This comes as Telegram Messenger, the fourth most popular messaging app by number of active monthly users after Meta's WhatsApp, WeChat and Facebook Messenger, is now offering cryptocurrency payments to advertisers and content creators on the messaging app. This follows the news that the company has announced that it will pivot to cryptocurrency payments. .
As PYMNTS has covered, while cryptocurrencies have been successful not only as unregulated stores of value but also as tools for fraudsters, digital assets have become a commodity and We still haven't figured out how it functions as a means of payment for products. service.
When it comes to cryptocurrencies, “unfamiliarity can lead to a lack of comfort and often leads to non-adoption,” Ajay Rajani, vice president of expansion and cryptocurrencies at Tara, told PYMNTS. Told.
Last month, PYMNTS explored the benefits of cryptocurrency payments in a conversation with Brad Chase, head of liquidity products at enterprise crypto solutions company Ripple, and found that moving from traditional rails to cryptocurrencies can increase up to 70% He pointed to research showing that cost savings can be obtained.
“Cryptocurrency is a digitally native global asset,” Chase told PYMNTS. “And if you think about the emerging digital-native, tech-savvy customer segment, they own cryptocurrencies and want to use them for payments.”
In its 2023 report “Credit Union Innovation: Bridging the Cryptocurrency Divide,” PYMNTS Intelligence, in collaboration with PSCU, found that just under one in three U.S. consumers (31%) own cryptocurrencies. , indicating that those who own cryptocurrencies are more likely to consider them when: Make many financial decisions.
read more: Cryptocurrency continues to serve as a case study in behavioral economics
Embedded cryptocurrency payments aim for smooth integration
Proponents of digital assets say using cryptocurrencies for payments offers the advantage of faster transaction settlement compared to many traditional methods, offering buyers an attractive real-world outlet for their crypto holdings. We believe that we can provide the following.
Stripe is positioning its crypto capabilities as an easy way to incorporate cryptocurrency purchases directly into your checkout flow.
PYMNTS Intelligence found that positive checkout experiences keep customers coming back to merchants.
As Stripe President of Product and Business Will Gaebrick told PYMNTS' Karen Webster in a June interview, consumers don't have to wade through drop-down menus or enter card details and expiration dates. If so, they often walk away before the transaction is completed.
“We intelligently 'order' payment methods based on which method is most likely to convert for that session and that consumer,” Gaebrick said at the time.
