Why are companies implementing crypto payments?
Blockchain is an open-source distributed ledger technology (DLT). It can help create digital asset registries that are shared across platforms, thus leading to more transparency in the supply chain and optimising product management. It is the basis of cryptocurrencies like Bitcoin and Ethereum because it can record and verify high volumes of virtual transactions while being secure. This removes the need for third parties and puts an end to corruption, which are just two reasons why companies adhere to such payment methods besides affordability and appealing to a new audience.
Cryptocurrency payments offer various advantages for organisations, which you may learn about below, and these facts are supported by examples of companies that use blockchain technology.
Reasons why companies use the blockchain technology
A network of computers distributes, maintains, and validates blockchain world-widely. Instead of having a bank or the like as an authority, blockchain records are overseen by a broad community. No individual or business can control this data, which appeals to increasingly more business owners. Because it is built on decentralised technology, it operates as a peer-to-peer (P2P) network.
Independent notes simultaneously record each transaction in a block, and you can use them on a computer, server or smartphone. They offer a complete financial record of money transfers and protection from fraud. Plus, blockchain is immutable, meaning that blocks cannot be changed in any manner and nodes do not control the chain. A chain hack isn’t technically impossible, but changing more than half of the blocks to perform the “51% attack” is nearly inconceivable.
Automation and improved safety are other reasons why companies adhere to blockchain solutions. Business owners want to remove the need for third parties to validate transactions to cut overhead and the possibility of corruption. Every financial transaction, from essential merchant shopping to investment banking, requires authentication, and all must be paid for “touching” the transaction. Many fintech enthusiasts feel that cryptocurrency payments have the potential to save money and time.
Cryptocurrency enables “hands-off” payments
Enterprises that use crypto payments are taking a “hands-off” approach that keeps Bitcoin, Ethereum, and so on off the books and facilitates payments. One method for facilitating payments is simply converting digital coins to fiat cash, and accepting or making payments without ever touching it.
Enabling such payments without bringing them onto the firm’s balance sheet may be the fastest and easiest entry point into the use of cryptocurrencies. Some changes might be needed across the spectrum of organisational processes, but this may fulfil long-term goals such as acquiring new customers and increasing the volume of each sales transaction. Usually, companies that make this move rely on third-party vendors, which act as an organisation’s agent, and receive or make payments in the cryptocurrency by converting it into and out of fiat money. This may be the most straightforward path to take. The third-party vendor manages some risk, controls and compliance on the company’s behalf and handles most of the technical queries for a fee.
Another means of taking advantage of the cryptocurrency received is portfolio diversification. For example, some act like investors and engage in trading practices, holding, trading, or buying more after checking the Bitcoin and Ethereum price today. Usually, this calls for more in-depth research because it takes a little knowledge to decide what other digital currencies to invest in. There are so many, which can be confusing. Luckily, charts show a highly accurate history of cryptocurrencies, so it’s easier to hop on the trend and be up-to-date with fluctuations.
Four companies that use blockchain payments
PayPal, a global online payment network, enables the transfer of Bitcoin, Ethereum, and Litecoin. It does not impose fees for moving bitcoin onto or within the network and accepts cryptocurrencies for payment at millions of merchant locations.
However, there are more renowned companies that take advantage of blockchain. Here are some examples:
- Circle.The Circle Pay function is accessible in more than 30 countries and in British pounds, U.S. dollars, and euros. This app enables safe money transfers between different countries, individuals, and currencies. Each transfer of funds is encrypted on a blockchain to ensure a secure transaction. As a result, the Circle Pay app functions as a group chat app with a payment feature integrated. You may send money while sending selfies and memes to your friends.
- AMD.Advanced Micro Devices develops core technologies for data centres, computer hardware, and elevated gaming and computing. Blockchain Compute devices integrate GPU and CPU hardware to support safe and efficient blockchain transactions. It has also collaborated with other blockchain firms to develop gaming and rendering systems.
- Microsoft.Microsoft’s Azure platform, in collaboration with ConsenSys, delivers the Quorum Blockchain Service, which assists in the adoption of blockchain across various industries. Companies such as Prescriptive Health and Bosch use fully-managed ledger services to create and scale business smart contracts and blockchain applications in the cloud.
- Intel corporation.Intel’s Hyperledger Sawtooth network, created in conjunction with SAP, IBM and Linux Foundation, is an enterprise-level blockchain platform for developing smart contracts and blockchain apps. Its platform provides data security from open-source information collection, third parties, and a nearly unhackable ledger.
By allowing consumers to pay with cryptocurrency, retailers gain access to a new client group that is only growing over time and gain a competitive edge in the market.
Though credit and debit cards aren’t going away anytime soon, businesses must adapt to the increased use of digital payment options such as online bank transfers and smartphone payment applications. To cater to as many demographics and interests as possible while increasing sales, a business should diversify payment choices.
This can be done in five steps:
- understanding regulations in the area of performing
- setting up a crypto wallet or gateway
- enabling crypto payments in the checkout process
- integrating crypto payments with the accounting software
- preparing for crypto fluctuations by converting them into cash.