5 Ways Bitcoin Can Benefit E-commerce
Consumer trends are changing rapidly, but the most significant changes focus on convenience of access to goods and services and payment security. The COVID 19 pandemic has further reinforced this trend, significantly encouraging contactless transactions. This is good news for the e-commerce industry, which relies heavily on online payment processing. Although several electronic payment options exist, e-commerce needs a more reliable, secure and convenient payment method like Bitcoin. Here are five ways Bitcoin can benefit e-commerce.
- Increased access to new and emerging markets
Credit cards, debit cards and e-money processors have been the only means used by online merchants to process customer payments. While efficient, these payment methods limit merchants to dealing with consumers who only have access to banking services. It also hinders their expansion, which has a significant impact on profits.
Bitcoin eliminates these obstacles since it is a decentralized currency recognized and accepted around the world. Bitcoin users do not need bank accounts or money processors to transact. Anyone with stable Internet access and a smartphone can open a digital wallet, buy Bitcoins on cryptocurrency exchanges such as bitiq and transact with funds worldwide.
Integrating Bitcoin as a payment method allows merchants to quickly target and attract new customers from among the largest number of active cryptocurrency users. Bitcoin gives customers more options when paying, allowing merchants to transact with consumers around the world seamlessly.
- Secure payment processing
Traditional payment systems typically use intermediaries to process cross-border payments. This often leads to several security risks including fraud and data theft as most service providers share customer information with third parties. Bitcoin eliminates these risks with its public digital ledger. The Bitcoin network uses blockchain technology to verify and validate all transactions on the log without any third-party involvement.
Neither merchants nor customers can modify transactions after validation. Additionally, Bitcoin users can also transact anonymously, further promoting privacy. The public Bitcoin ledger also allows merchants and customers to track their transaction history in real time. This ensures easier and faster resolution of payment disputes.
- Low cost transactions
The absence of third parties in Bitcoin transactions is one of the main reasons why payments are much cheaper than credit cards, debit cards or money processors. Bitcoin is a peer-to-peer network that facilitates transactions between two involved parties without outside intervention. Miners charge a small fee to validate transactions, but the costs are minimal compared to other payment methods. Lower transaction fees can help merchants reduce operational costs and attract many global consumers looking to pay for goods and services in cryptocurrencies.
- Instant payment processing
Online businesses transact with consumers around the world. However, payment processing has not been easy as conventional payment methods are subject to various government and institutional regulations. This is why bank transfers or credit card payments often take several hours, days or weeks to process, which contributes to greater inconvenience. Bitcoin payments are made on the blockchain and are not subject to regulatory restrictions. Thus, their treatment usually lasts only a few minutes.
- supply chain management
Established e-commerce merchants have extensive supply chains that span across various geographic boundaries. Managing these supply chains is usually not very easy and can be quite expensive. Blockchain technology offers a less restrictive and secure platform to manage supply chains digitally. Like smart contracts, merchants can use blockchain to expedite orders and payments to vendors based on individual needs and preferences. Online businesses could even integrate additional features into the blockchain to automatically alert suppliers when certain products are out of stock. This would save them the stress of daily inventory and reduce costs.
Bitcoin is increasingly becoming a common currency, accepted by online merchants around the world. It has proven its immense potential in facilitating fast, secure and low-cost payment processing, as well as increased access to emerging markets globally. Its blockchain technology can also offer merchants convenient tools for supply chain management.
