Cryptocurrencies have always been speculated to impact the online payment industry. The basic idea of a fast and cheap transaction system has made digital currencies a dream come true for an online merchant. After the arrival of bitcoin, market experts have pushed the possibilities of virtual coins becoming the prominent currency for online trades.
John Rainey, CFO PayPal, stated that online sellers are a bit skeptical about including digital currencies in their framework. He believes that high volatility is the only reason for these dealers to be cautious of virtual coins.
He said, “Because of the volatility of the cryptocurrencies, the merchants saw swings in crypto that threatened the viability of their businesses. If you’re a merchant and you have, let’s say, a 10 percent margin on a product that you sell and you accept bitcoin, for example, and the very next day it moves 15 percent, you’re now underwater on that transaction.”
According to reports most of the PayPal retailers are not comfortable with virtual coins due to the instability. The crypto market faced a mind-boggling drop of 50 percent in its total value after the boom of December 2017. Moreover, in the first quarter of 2018 bitcoin lost a staggering $119 billion in market cap.
He added that the meteoric rise of bitcoin’s popularity does not guarantee its worth as a payment channel. Although, crypto enjoys a considerable following yet it is the sellers who can decide its fate in online trade. Rainey said that “Right now, we don’t see a lot of interest from our merchants,” but we would back up the technology if it becomes more stable in the future.
It is still not clear how the volatility of digital currencies can affect the profit of online sellers. BitPay and Coinbase usually lock the value of a payment in the form of digital currencies at the very moment of purchase. Thus, the trading platform remains untouched even after the value of the coins alter after the deal.
Dealers can use the same technique to wipe out the only problem they have with cryptocurrencies. They can also allow users to pay in the form of stable coins which are permanently pegged to the USD. Such coins will only require the highest level of liquidity to save the infrastructure from a potential collapse.
On the other hand, few online retailers have allowed their customers to pay in private coins. It is being reported that people have been using altcoins like Monero to undertake discreet deals that are unwanted on their credit card statement. The strategy has also been adopted by Purism, a security-centered laptop manufacturer, and for the payment of online services like VPN.
CheapAir has allowed its users to pay in dash, bitcoin cash, and litecoin while Coinpayemnts, a crypto payment system, has expanded its operations in Europe. Crypto Emporium is another marketplace which accepts payments in altcoins against luxury goods ranging from clothes to property. Eventually, digital trading giants would have to incorporate digital currencies as ignoring a trend can be costly in the retail business.
