Cryptocurrency has changed the way we do business. It is growing more popular as a payment method for various industries and businesses, particularly e-commerce. While there are various advantages to accepting cryptocurrency for e-commerce businesses, such as lower cart abandonment rates and a smoother and more effective payment process for customers, selecting the right cryptocurrency for your e-commerce can be challenging.
One thing is adopting and accepting cryptocurrencies as a payment method for your online business. Another thing is knowing the right cryptocurrency with swift confirmation and the lowest transaction cost. Knowing which cryptocurrency is suitable for your business can be tough, with over a thousand cryptocurrencies accessible, ranging from high cap to mid-cap to low cap.
So, in this post, we'll look at how to pick the best cryptocurrency for your online business and what factors to consider when selecting a cryptocurrency as a payment method for your e-commerce site. We'll also look at some of the most popular cryptocurrencies for e-commerce and their benefits and drawbacks. Let's get started.
Considerations for Choosing a Cryptocurrency for Your E-commerce
Market capitalization is the total value of all coins of a specific cryptocurrency currently circulating. It is computed by multiplying a cryptocurrency's most recent price by the total number of coins in circulation. When a cryptocurrency has a big market capitalization, it is well-established, well-known, and has a large user base.
When compared to lesser-known cryptocurrencies, this can result in more stability. Choosing a cryptocurrency with a high market value may provide more certainty of acceptance and longevity for your business.
Volatility is the rate at which the price of a cryptocurrency asset rises or falls for a given set of returns. Cryptocurrencies are more volatile than regular fiat currencies. This means that their value could fluctuate quickly and dramatically.
A volatile cryptocurrency may suggest that the value of payments received may decline (or increase) dramatically, affecting profitability. Consider cryptocurrencies with lower volatility if stability is critical to your operations.
Utility in cryptocurrency refers to the digital coin's practical application beyond its usage as a means of exchange. Some cryptocurrencies are designed to serve certain purposes and platforms, while others may be designed to facilitate smart contracts or maintain privacy.
For e-commerce, it's best to choose a cryptocurrency with direct utility, which means it's widely accepted and can be used as legal tender. Cryptocurrencies that do not provide direct utility may be perceived as more speculative and less viable for regular transactions.
Cryptocurrencies are frequently associated with various fees. These could include transaction fees required to ensure the network executes your transaction. Additionally, purchasing or selling cryptocurrency may involve costs depending on the exchange platform.
High fees can eat into profit margins for e-commerce businesses, particularly when dealing with large transactions. To minimize fees, you must know and understand the fee structure of any cryptocurrency you consider.
Security is critical in the world of digital currency. The underlying technology of most cryptocurrencies is blockchain, which is well-known for its security qualities. However, the security protocols used by cryptocurrencies vary. Choosing one with a proven track record of resistance to cyberattacks and unlawful transactions is critical. Keeping transactions secure protects both the e-commerce company and its customers.
Best Cryptocurrencies for E-commerce Businesses and Why
Bitcoin, the "mother of cryptocurrency," is the most well-known and frequently utilized digital currency. Because of its widespread awareness and acceptability, many e-commerce platforms and payment gateways accept Bitcoin payments.
Because Bitcoin is decentralized and not bound to any country's financial system, it allows businesses to tap into a global market. Bitcoin is frequently the first choice for e-commerce businesses wishing to embrace a cryptocurrency due to its widespread acceptance and established reputation.
Ethereum is more than a cryptocurrency; it's a platform for smart contracts, making transactions more secure and transparent. Ethereum can provide more than just a payment solution for e-commerce businesses. Its smart contract capacity can automate specific corporate procedures, ensuring they are carried out exactly as promised.
The Ethereum ERC-20 token standard also allows for the production of new tokens, allowing businesses to start loyalty programs or rewards with their tokens.
Litecoin, frequently referred to as the silver to Bitcoin's gold, has speedier transaction times and a unique hashing algorithm. This means faster payment confirmations for e-commerce businesses, allowing for a more seamless transaction procedure for customers. The fees associated with Litecoin are also quite minimal, ensuring that transaction expenses do not diminish profit margins.
Ripple stands out due to its digital payment protocol more than its cryptocurrency. It is designed for quick, direct transfers between two parties, completing transactions in seconds. This speed benefits e-commerce businesses, as quick transaction confirmations can improve the customer's experience.
Ripple's method also allows any money transfer, including USD, Yen, and others.
Stablecoins are a distinct type of cryptocurrency that aims to provide price stability by being pegged to a reserve of assets, typically fiat currencies like the US dollar or euro or commodities like gold. Stablecoins can be an important aspect of a crypto payment strategy for e-commerce. Businesses that accept stablecoins can reap the benefits of blockchain technology, such as quick, transparent transactions and global reach while decreasing their vulnerability to price fluctuations. Tether (USDT), USD Coin (USDC), and DAI are well-known stablecoins for e-commerce businesses to explore since they offer the best of both worlds: blockchain efficiency and price stability.
How to Incorporate Crypto into E-commerce
Select a Reliable Crypto Payment Gateway
Choosing the right cryptocurrency payment gateway is the first step in enabling crypto transactions in an e-commerce business. Payment gateways like CCPayment are reputable and well-known.
CCPayment excels in features such as converting cryptocurrency payments into local cash, thus mitigating the risks associated with price fluctuation. Also, a real-time settlement ensures businesses receive payments almost immediately following a successful transaction.
Integrate with the E-commerce Platform
Once a crypto payment gateway has been selected, it must be integrated into the e-commerce platform. This entails incorporating the gateway's API into the e-commerce system. Many cryptocurrency payment processors provide plugins or modules created expressly for popular e-commerce platforms, making integration simple.
CCPayment uses a universal payment API that can be integrated into any website or e-commerce platform to facilitate Bitcoin, Ethereum, and several other cryptocurrencies.
Ensure User-friendly Interfaces
The customer's experience should remain simple and intuitive even when adding a new payment option. This includes explicit options for using cryptocurrencies as a payment method, transparent conversion rates, and simple transaction completion methods. Customers should grasp the crypto payment, the equivalent in fiat currency, and any associated transaction fees during checkout.
Stay Informed about Regulations
Cryptocurrency regulations differ from country to country and even within countries. To prevent legal concerns, e-commerce businesses must be aware of and comply with these requirements.
Choosing the right cryptocurrency for your e-commerce business is critical to stay competitive in today's digital economy. It's not just about adopting a new trend; it's also about recognizing each cryptocurrency's specific benefits and drawbacks. Businesses can make well-informed choices that benefit their operations and customers by carefully examining market capitalization, volatility, utility, fees, and security.
With consumer demand for various cryptocurrencies to make payments with, using a crypto payment gateway like CCPayment, which accepts 45+ cryptocurrencies, makes selecting the right currency depending on customer choice easier.
Get started with CCPayment to take charge of your business's payment method and choose the right currency for every customer.