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Currently, most businesses hope to use cryptocurrencies for payments. Alexander Mamasidikov, co-founder of mobile digital bank MinePlex, said cryptocurrencies have not yet been able to replace Fiat for payments, but could add more to Fiat.
The desire to use cryptocurrencies for international payments
A recent report by Crypto.com and Worldpay revealed some interesting things. 75% of Crypto.com customers expressed interest in using digital assets to purchase goods and services. But the survey found that only 4% of them accept cryptocurrencies. The other 56% see the deployment of cryptocurrencies as a payment method for their solutions in the short term.
Since 2020, payments in cryptocurrencies have increased rapidly. Millions of retailers and organizations have joined to gradually gain access to this type of digital asset. However, we should also explore in another important aspect of cryptocurrencies in addition to investments. It is the ability to pay quickly and conveniently.
Challenges for small businesses in transforming payment methods
When it comes to cryptocurrency or fiat payments, many small businesses say replacing Fiat payment methods with cryptocurrencies is not yet an option for most market participants. There are many reasons for this:
First: Unlike major Fiat currencies, digital assets can increase volatility. For retailers, a 5% drop in the value of BTC can be large enough to make a hole on an order. Moreover, they do not have enough patience and the ability to hold their assets until the price returns to the level that the client used to pay for his transaction.
Obviously, small businesses may decide to only accept stablecoins – cryptocurrencies that are tied to the prices of major Fiat currencies or other stable assets for their products. However, such a move would backfire as it makes many customers passionate about their cryptocurrency, who prefer to pay their transactions through digital assets such as Bitcoin, Ethereum (ETH) and Dogecoin (DOGE).
Moreover, the complete replacement of traditional payment methods with cryptocurrencies will likely create serious cash flow-related problems for retailers. Even if it solves the problem of volatility, the business needs to use digital assets to pay its suppliers, contractors, and other partners. As a result, retailers still have to use Fiat money to settle these payments.
Other expenses
Although the number of businesses accepting cryptocurrencies is increasing, users have not been able to pay for their homes, grocery store purchases, or money to pay their children's school fees in cryptocurrencies. So far, only a few businesses have agreed to pay for these areas.
However, if small businesses maintain such a move then it is very likely to lose a large number of customers. By usingcryptocurrency payment methods, you can attract a new pool of customers with knowledgeable people from the tech sector to your online store. And they can even be extremely wealthy customers.
Cryptocurrency payments could complement Fiat
From the above analysis, retailers have not accepted the change in payment methods. Given the current potential, cryptocurrencies are likely to act as complementary methods for Fiat. In the future, it will play a very important role in the financial sector.
Although it is impossible for businesses to give up credit cards and bank accounts to replace cryptocurrencies, there will be many companies expanding the service to meet the growing demands of consumers.
Through the above article, it can be seen that at the present time cryptocurrencies cannot completely replace fiat money. But in the face of such a tumultuous period, no one can say anything in advance.
