Retailers are noticing that consumers are using cryptocurrency to pay for a variety of goods – from Starbucks to Lamborghini’s.
In a report titled “Merchants getting ready for crypto,” Deloitte found that nearly 75% of retailers plan to accept either cryptocurrencies or stablecoins within the next two years.
The survey was conducted by Deloitte among 2,000 senior executives from the retail industry. These executives came from cosmetics, electronics, fashion, transportation, food, and beverage sub-sectors.
Bitcoin and other digital currencies are typically only as valuable as users believe them to be, but stablecoins derive their value from underlying assets. It is common for stablecoins to be pegged to currencies like the U.S. dollar or commodities like gold.
A little over half of the retailers surveyed have invested over $1 million into enabling digital payments, despite cryptocurrency being relatively new now. In addition, 83 percent of retailers expect interest in digital currencies to increase over the next year.
Crypto will soon allow consumers to buy clothes, drinks, beauty products, and more.
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How retailers plan to enable payments with digital currency
Retailers may accept digital currency for payments, but that doesn’t necessarily mean they’ll hold on to it.
In just over half of respondents’ surveys, third-party payment processors will convert digital currency into fiat, which is money defined as legal tender by governments, like the dollar, the pound, and the euro. In other words, the retailers don’t intend to own the cryptocurrency used for payment.
Retailers consider this strategy less risky than holding crypto themselves, given the unpredictability of the crypto market. Deloitte reports that this approach makes it easier for retailers to accept payments in digital currencies.
Barriers to enabling payments with cryptocurrency
Several challenges must be overcome by crypto-curious retailers for digital currency payments to be enabled. Most respondents cited the difficulty of making their existing financial infrastructure compatible with digital currencies as their greatest challenge.
According to the survey, security concerns about payment platforms ranked highest among barriers to adoption, followed by concerns about regulatory changes and market instability.
The majority of retailers are in favor of enacting regulations regarding cryptocurrency, including national guidelines around holding digital assets, clarity about the implications of using digital currencies, and the ability to store digital currencies in a bank account.
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Retailers remain optimistic about the future of payments made with cryptocurrency
While retailers have concerns about the benefits of enabling crypto payments, they remain optimistic. In nearly half of the cases, retailers believe that they will be able to increase their customer base and improve the customer experience.
“In conclusion, it is expected that further partnerships with regulated and established institutions will continue to build trust and deliver the benefits of digital currencies (e.g., convenience and support).”
The ability to pay in crypto may be a welcome development for some users, but it’s important to remember that cryptocurrency is highly volatile, and experts recommend investing only what you can afford to lose.
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