Crypto payment systems are still being installed at a rapid pace
Crypto payment systems: Despite looming fears of a coming recession, the global financial services industry continues to evolve at a rapid pace, according to Dmitry Ivanovthe CMO of CoinsPaid.
This is partly due to the COVID pandemic, which has fueled growth in demand for digital payments and more efficient ways to settle transactions.
Consequently, this demand has accelerated the development and adoption of innovative financial technology solutions. These examples include biometric verification, digital IDs, IoT-enabled transactions, e-wallets, and payment methods integrated into instant messaging apps.
But what is the role of cryptocurrency in this evolving payment system?
Wall Street eyeing crypto
Until recent years, it was common for financial industry players to loudly criticize cryptocurrencies. They were often associated with illegal transactions, Ponzi schemes and historic market bubbles. However, as digital assets matured, many began to see their potential.
JPMorgan is a prime example here. JPM CEO Jamie Dimon called Bitcoin a “fraud” in 2017. But the investment banking giant now has a dedicated crypto division with over 200 employees (Onyx Digital Assets). And it seeks to tokenize stocks and serve as a DeFi bridge.
And JPM isn’t the only financial giant eyeing crypto. Bank of America, Goldman Sachs, BlackRock and many others have already introduced it or are currently developing their digital asset-based offerings.
Crypto-payment systems: Adoption
Outside of Wall Street, businesses are increasingly adopting digital assets for payments. Recently, Deloitte released the results of its Merchant Adoption of Digital Currency Payments survey.
2,000 senior executives of retail companies in the United States last December were surveyed. The results of the study show that 85% of respondents place a high or very high priority on enabling cryptocurrency payments. Meanwhile, nearly 75% said they plan to accept stablecoins or other digital assets within the next 24 months.
Additionally, major brands such as Microsoft, Gucci, AT&T, Starbucks, KFC, and Burger King all accept cryptocurrency payments for their products and services, with this list growing every day.
Payment giants are also increasingly leveraging crypto to attract new customers and meet changing consumer demands.
PayPal launched a service in October 2020 to allow US users to buy, sell and hold coins. However, Visa and MasterCard are looking to directly integrate cryptocurrency payments directly into their systems. As a result, more merchants could start accepting digital assets while making it easier for consumers to use them to settle day-to-day transactions.
As consumers wait for this to happen, the use of crypto debit cards has increased. Visa recorded $2.5 billion in digital asset revenue for the first quarter of 2022. Accepted by millions of merchants, cryptocurrency cards work like conventional payment cards. The main difference between the two is that holders spend digital assets with the previous one, which are automatically converted into fiat currencies at the time of the transaction.
An alternative to conventional payment methods
Along with merchants, luxury brands, financial services companies, and Wall Street giants, the demand for crypto transactions is also growing among consumers. In fact, according to Deloitte, 96% of surveyed enterprise customers indicated significant (64%) or moderate (32%) interest in using cryptocurrencies for payments.
And that shouldn’t be a surprise.
Unlike bank transfers and credit card payments, digital asset transactions don’t need any middlemen to arrive safely at the recipient’s wallet. For this reason, they offer consumers a cost-effective alternative to settling their daily payments with near-instant transfers.
Additionally, consumers could leverage stablecoins for their payments to eliminate the risks associated with the increased volatility of cryptocurrencies. At the same time, businesses can use crypto processing services that automatically convert customers’ unstable digital assets into fiat currency to avoid the impacts of price fluctuations.
Crypto-payment systems: The transition
While prices have fallen significantly from last November’s high, crypto adoption looks better than ever. Financial firms, retailers and big brands are racing to meet growing consumer demands for digital asset payments.
Of course, switching to crypto would also be beneficial for individuals. On the one hand, investors could use their holdings to cover expenses without converting their digital assets into fiat currencies. At the same time, cryptocurrency will simplify everyday payments for consumers. They offer lower fees, faster settlement times and do not require the services of financial intermediaries.
However, I believe the industry needs more regulatory clarity and a positive government stance towards the industry. This would accelerate the transition to crypto transactions in the evolving payments landscape.
Crypto-payment systems: regulation
Despite the positive trends we have explored in this article, digital assets are unregulated or semi-regulated in many jurisdictions. And, due to the lack of clarity, businesses remain reluctant to embrace crypto payments.
On the other hand, a crypto-friendly regulatory framework like the one in the UAE can foster growth and adoption. After the Ruler of Dubai issued the Emirate’s Digital Assets Act in February 2022, many blockchain companies opened offices in the city to enter the local market. As a result, business adoption of crypto has increased in the UAE, with luxury property developer Damac, daily superstore and airline Emirates announcing plans to accept digital asset payments.
That said, bills such as the US Responsible Financial Innovation Act (RFIA) or European Crypto-Asset Markets (MiCA) could help create frameworks around digital assets that can encourage their adoption for investors. payments.
About the Author
Dmitry Ivanov is the CMO of the CoinsPaid crypto payment ecosystem, an ecosystem of cryptocurrency products that aims to meet the world’s everyday needs by leveraging blockchain technology and crypto payments. Dmitry is a crypto payments and crypto adoption expert with extensive experience in business development and marketing.
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