The evolution of eCommerce payments evolves rapidly with technology. As eCommerce involves buying and selling, consequently involving monetary payments, the development of digital finance and assets holds massive potential in terms of revolutionizing online transactions, and cryptocurrency, which has gained prominence over the last decade, is a go-to solution.
With benefits such as enhanced security, reduced fees, and a global market reach, cryptocurrency is the most sought-after payment solution; however, it is not without its challenges.
Cryptocurrencies are notorious for unpredictable price volatility, intricate tax implications, and customer hesitation, among other challenges; however, all of these challenges have straightforward solutions that allow you as a business owner to accept cryptocurrencies, and despite these perceived hurdles, this article outlines a comprehensive set of strategies that will empower you to not only conquer these challenges but thrive within the world of crypto eCommerce.
Challenges Facing E-Commerce Merchants in Crypto Adoption
Cryptocurrencies are reshaping the e-commerce landscape, but like any transformative force, they come with unique challenges, as outlined in this article’s introduction. However, before trying to solve these problems, it is first important to understand them. So, with that in mind, let's dive into each of these hurdles and gain a deeper perspective.
Volatility of Cryptocurrencies
Cryptocurrencies are renowned for their price volatility. Unlike traditional fiat currencies, the value of a cryptocurrency can experience dramatic rises and falls in hours or even minutes.
While this volatility may appeal to traders and speculators, it poses a significant risk to business transactions. Imagine selling a product for a specific amount of cryptocurrency, only to discover that its fiat value has dropped by 30% before you can exchange it. This level of volatility may hurt your profit margins and your overall business finances.
Picture it this way: a customer makes a payment for goods at 0.01 BTC worth $300 by 9 a.m., and by 9:15 a.m., the market gathers some negative speculation, and within a few minutes, your 0.01 BTC is now worth $270. Now, you are perplexed about whether to cash into fiat currency at a loss, or to hold on to what you have, facing the risk of further uncertainty.
Of course, nobody wants to face uncertainty about their finances; hence, the volatility associated with cryptocurrencies challenges business owners and makes it difficult for them to accept cryptocurrencies as payment.
The intricacies of cryptocurrency taxation are complex and vary across different countries, states, and jurisdictions.
In many countries, cryptocurrency, like other assets, is taxable. This means that profits from buying and selling cryptocurrencies are frequently subject to capital gains tax. In such a case, if your crypto payment appreciates while in your custody, you’d be required to pay taxes on the gains accrued.
So, in situations like these, if you don’t have to worry about extra tax calculations, you may immediately convert your cryptocurrencies to fiat upon receipt.
It could be different in some other places, and this complexity could confuse business owners, as they don’t want to get into legal trouble for failing to declare crypto income or gains.
However, with the right knowledge of tax implications, e-commerce businesses can stay on the right side of the law, and avoid penalties and compliance issues.
Customer Hesitation Due To Lack Of Familiarity
While the adoption of cryptocurrencies is on the rise, many potential customers remain unfamiliar with the concept and are hesitant to learn more about it. This comes as no surprise, as people are generally cautious when dealing with things they don’t understand, especially when it involves their money.
Many people have heard of Bitcoin and cryptocurrency but shy away from trying to know more about them, mainly due to the perceived complexity of these digital assets
This can be challenging for you as an E-commerce merchant who has a Bitcoin payment button on your website. Hence, the challenge of hesitant customers is one big hurdle that must be jumped!
Security and Fraud Concerns
Indeed, cryptocurrencies offer robust security features through blockchain technology, making transactions trackable and making it easy to identify theft patterns. However, the hassle of retrieving lost assets when they are missing can be exhausting, even without perfect assurances of getting through the theft.
It could take several months to locate and arrest a thief, and at other times, it may be impossible, especially in cases of mass theft. So, in one word, it is better to be safe than sorry.
Many times, potential customers worry that if their assets get stolen, they may be irretrievable, and they may lack adequate support personnel to discuss this with, especially for people using noncustodial wallets.
As a result, security concerns stand as one of the biggest reasons why people stick to traditional finance methods where they can call out the service provider, visit a physical office, complain to customer support agents, who can block accounts, etc.
This underlines the importance of reassuring security protocols when dealing with crypto assets.
How To Overcome Challenges Facing Crypto Payments For E-Commerce
There is no one-size-fits-all approach to mitigating the potential dangers of these challenges.
To mitigate issues regarding customer hesitation, it is advisable to take dynamic approaches, such as writing blog posts to educate users about the benefits of crypto payments. You can get some ideas from CCPayment’s blog. You can also employ exclusive discounts, cashback, rewards, and promo offers to encourage skeptics and influence their decisions.
For tax concerns, the most important thing is to get acquainted with the tax laws in your business jurisdictions, and while you do that, it is important to have a payment processor that gives a detailed analysis of your crypto income so as to aid tax reporting. With CCPayment’s accounting tools, you can easily generate financial reports to track expenses, reconcile payments, and keep track of your cash flow, all of which help to correctly report taxes and, overall, make informed financial decisions for your business.
Beyond tax reporting, the payment processor you employ to process your transactions can go a long way toward ensuring that you don’t have to worry about volatility and security.
Given that crypto payment gateways operate as middlemen between you and your customers, the one you choose can heavily impact volatility and security due to the factors outlined below.
What To Look Out For When Selecting A Crypto Payment Processor To Avoid Volatility and Fraud
- Supported cryptocurrencies: As there are over 20,000 cryptocurrencies in existence, it is important to have a payment gateway that supports a wide range of currencies, including stablecoins.
Stablecoins are cryptocurrencies pegged to a stable asset like fiat currency or commodities, providing stability and eliminating price fluctuations. By accepting stablecoins like BUSD, USDC, USDT, and DAI, you can ensure that shoppers can transact using cryptocurrencies and avoid volatility risks.
A crypto payment processor that offers stablecoins alongside other cryptocurrencies will allow you to enjoy flexibility, whether you’d prefer to hold an asset and bet on its rise in value or just receive them in stablecoins, free of volatile market changes.
- Security Protocols: Beyond having measures for users’ self-protection, such as 2-factor authentication, secure login protocols, and so on, it is important that your chosen payment processor has robust security features that secure the platform in general. No matter how well you secure your account, your funds are in jeopardy if your payment processor is breached. Hence, a crypto payment gateway with robust security protocols is non-negotiable.
Learn more about CCPayment’s security protocols
CCPayment - Your Ideal Crypto Payment Gateway
CCPayment is a leading crypto payment gateway service that enables businesses to accept crypto payments. While its major appeal is its unique ease of integration, where you can add a crypto payment button to your existing checkout page via API integration, CCPayment has features that can help you mitigate volatility and security issues. Some of these include:
- 800+ cryptocurrencies accepted, including 4 stablecoins - USDT, USDC, BUSD, and DAI
- CCPayment also automatically reads payments on your checkout page as fiat and only automatically converts them to cryptocurrency at the point of payment. This makes it possible to process crypto payments from fiat within a few seconds so that you don’t lose money to rapid changes.
- Two-factor authentication procedures to safeguard merchant accounts.
- Robust security features, including the National Institute of Standards and Technology's (NIST) strongest encryption algorithm, the AES, to protect sensitive data, as well as a dual key encryption mechanism to safeguard merchants’ and customers’ account assets.
CCPayment is also equipped with Real-Time system monitoring and dynamic defense measures, which respond to any suspicious activity as it happens, reducing the window of opportunity for potential attackers.
As outlined throughout this article, Crypto eCommerce, despite its awesome appeal, has unique challenges. However, with the comprehensive strategies outlined in this article, you should easily overcome these challenges and thrive in the world of crypto eCommerce.
However, at the center of these solutions is your choice of a crypto payment processor, which can make or break your crypto eCommerce business.
With CCPayment’s accounting features, a wide range of cryptocurrency support, and cutting-edge security features, it is the ideal partner to ease your crypto Ecommerce journey.
Take a bold leap into the future and accept crypto payments on your eCommerce website. With CCpayment right by your side, you can overcome any and every challenge! Get started now!