Blockchain and cryptocurrencies present an opportunity for companies to reduce costs of operations and cross-border payments. However, since only a few merchants and people are actually using crypto for payments, there is need to do more to popularize the tech for instance through integration with POS platforms.
Automation has been changing the way companies and individuals do business. Blockchain provides greater opportunity for improvement given its advantages over traditional automation tech. It could add more features and benefits.
As companies and startups look to gaining these advantages, there is now an unprecedented increase in the number of decentralized payment solutions that use cryptocurrencies. There are also token rewards apps that incentivize merchant orders and purchases for raw materials, goods, and services. Moreover, the market also saw a huge increase in the number of crypto exchanges and trading platforms.
Payment channels, on the other hand, are increasing. This is especially because blockchain allows for quick cross-border payments with fewer costs. While it has been possible to move money across the border previously, most of the traditional banking systems take two or more days. Crypto payment channels also provide another advantage in that they are less costly. Companies running these channels also provide loyalty programs to users.
Automation benefits provided by blockchain apps even attracted attention from the banking and governance fields. However, there is need to incentivize usage of cryptocurrencies and blockchain based apps for consumers and merchants. This would increase the volume of transactions and a strong avenue towards mainstream usage.
The only drawback for blockchain in this regard is its low adoption rate, pushback from regulators and the mainstream banking industry. This is without mentioning the volatility and other related issues such as security. But there are good reports. Cambridge Center for Alternative Finance said 75% of US consumers owning cryptocurrencies used them for payments within a 12-month period. Also, 48 percent of Coinbase users used Bitcoin to make one payment per year.
Besides, the situation may improve given that many companies continue to integrate crypto in their economy. For instance, some companies offer clients the option of paying with crypto and employees the option for receiving salaries in crypto. This is likely to gain grounds when crypto prices are higher than they currently are. More financial institutions and also governments are coming onboard with lots of custom solutions. Additionally, countries such as Japan, South Korea, and Germany have integrated cryptocurrencies into their economies. U.S., Canada, U.K., and France are catching up.
It is also likely that the over 1,570 cryptocurrencies will have more economic value through payment solutions given that makes $2.9 billion in revenue per year. It processes 80 globally recognized currencies and makes merely 0.0952 basis points from each transaction.
The number of unique users of crypto wallets shot between 2.9 and 5.8 million in 2017.
Most of the benefits are realized by a few crypto users and the few merchants. Apart from the regulatory issues and push backs by banks, there are also a number of tech barriers preventing crypto adoption to merchants and the general public.
Compared to mainstream solutions such as Visa, the technology — through developing — has a long way to go before it becomes mainstream or at least increases market share in financial markets to noticeable levels.
How can we achieve mainstream adoption?
More companies can begin looking at options such as using consensus algorithms to integrate proprietary software on existing POS solutions such that merchants can process cryptocurrencies payments on the spot.
Paytomat and On Track Innovations are already leading the way with similar features. With Paytomat, cryptocurrency developers, merchants, and consumers across all cryptocurrencies can do cashless transactions in between and among themselves thanks to partnerships between the company and merchants. The company facilitated 700 transactions in the past 6 months.
The move is seeing an integration of blockchain with existing POS platforms. Therefore, merchants are able to adopt blockchain without buying any new hardware that adds to costs. The company has partnerships with more than 100 partnerships with Ukrainian merchants. Thus, to allow their customers pay with cryptocurrencies with fewer hassles.
Therefore, while many companies such as Square Cash, B2BinPay, and CASHLINK are thinking about payment with crypto via digital platforms, current POS method is also a huge bet.
On Track Innovations has software that automates crypto payments in micro markets and across IoT devices.