SegPay VP Jeffrey Rosenzweig makes a guest blogger appearance to discuss the state of cryptocurrencies, and their potential for payments and payouts
Lately, it seems the topic of cryptocurrency is gaining traction in our space again. We are hearing more talk about Bitcoin and similar currencies finally gaining serious consideration as a payment alternative. For that reason, I wanted to share some thoughts on the state of cryptocurrency and how I see it fitting in for our merchants.
Awareness of cryptocurrency is at an all-time high. According to a recent study by LendEDU, 78.6% of Americans surveyed have heard of Bitcoin. However, we should not confuse awareness with adoption. The same survey showed that only 41.6% knew that owning Bitcoin is perfectly legal and a modest 13.99% of respondents ever owned any Bitcoin. Some cause for optimism: almost 40% of those surveyed said they are open to using Bitcoin for transactions and purchases.
So, what is stopping them? We see two primary factors preventing the average person from testing the digital currency waters: complexity and price volatility. Acquiring and cashing out of cryptocurrency involves setting up and funding a wallet, using an exchange, transferring in and out of the exchange, moving money back to your bank, and, optionally, having a local wallet as well. The process can be daunting to the average consumer. The aforementioned survey found that younger consumers are more likely to invest in Bitcoin, which supports the notion that you need some tech-savviness to utilize digital currency.
It also seems that the vast majority of the people currently invested in the crypto space are just that, investors. These currencies are perceived more as an investment instrument than a transactional tool, which explains the instability in the markets, and why a lot of people are fearful of getting involved.
At SegPay, we are exploring how best to integrate cryptocurrency as a consumer payment method. However, we see bigger potential in finding ways to handle merchant, affiliate, and even model payouts via digital currency. As more and more merchants, both in the U.S. and the EU, struggle to obtain and hold on to operating accounts, alternative settlement methods become more and more appealing.
I’d love to know what you think. If you are interested in the cryptocurrency space and have thoughts or feedback, please contact me anytime.