The wave of crypto adoption is still going strong despite the overall bearish momentum in the crypto sector and the ongoing regulatory uncertainty.
A recent survey, conducted by the FIS, in conjunction with Crypto.com revealed the attitudes around cryptocurrency as a medium of exchange. The survey concluded that there is a huge interest among both merchants and customers in using cryptocurrencies to transact in 2022.
The “Crypto for Payments” survey highlights a ten-fold disparity between customers and merchants transacting in crypto. The paper shows that despite 40% of customers would like to use some form of crypto to buy things, only 4% of merchants actually accept cryptocurrencies as payment options.
The report further notes that 60% of both customers and merchants are showing an increased interest in using and/or accepting crypto this year.
But, despite the retail sector being “hungry” for cryptos, a real crypto adoption scenario is not likely to happen at this rate. The primary reasons behind the adoption rate slowdown are the steep learning curve of crypto projects, as well as the complexities of coordinating these new payment systems among internal teams, which will add challenges for institutions.
However, if the immediate problems behind the merchant crypto adoptions are overcome, the merchants can use cryptos to lower transaction fees and dispute costs while appealing to a broader customer base.
Nevertheless, crypto volatility still sits as a number one cause of merchants not adopting cryptos as payment methods, since they may be hesitant to sell their products in exchange for crypto assets as the crypto value may drop substantially the next day, resulting in merchants selling at a loss.
What are the solutions?
Payment processing giants like Visa and Mastercard already started offering prepaid crypto cards. The way the cards operate is simple – users load their cards with their desired crypto, and, when they make a purchase, the payment processor converts users’ funds to fiat currency on the back end, before placing them in the merchant’s account.
It turns out, the survey denotes, that 65% of Crypto.com members use the Crypto.com Visa card, clearly demonstrating customer-side demand for crypto purchases.
Furthermore, merchants are increasingly starting to look at stablecoins for direct crypto-to-crypto value transfers. The survey showed that merchants are most interested in accepting USDC and large-cap cryptos for payment. Furthermore, most of the merchants that wish to adopt cryptos in their payments, are selling luxury goods, while customers are showing an increased interest in using cryptos for travel payments, despite the tourism sector is still lagging to accommodate for such payments.
Cryptos are stepping outside of paying for goods
To further spice things up in the crypto sector, several companies, including McDonald's, and car manufacturer Tesla, showcased their interest in cryptos, with Tesla adding Dogecoin as a payment method for the brand’s merchandise. However, only a few really take a step forward and add such functionalities.
For instance, U.K. law firm gunnercooke started accepting several cryptos in exchange for their legal and professional services. The cryptos include Bitcoin (BTC) and Ethereum (ETH), but also smaller altcoins like Cardano (ADA) and Dogecoin (DOGE).
The law firm started offering such payments in cooperation with cryptocurrency exchange Coinpass, which is registered with the Financial Conduct Authority (FCA).
According to gunnercooke, it is currently handling a client base of “around 100 cryptocurrency developers, platforms and exchanges,” with cryptocurrency staking company Attestant being the first to pay gunnercooke for its legal consultancy services in crypto.
“Up to now, only a few US law firms allow for crypto asset payments so we are proud to be at the forefront of innovation in the UK. We will now be able to work with a wider variety of clients across different jurisdictions, plus offer our partners the flexibility to be paid securely in the way they choose.” Naseer Patel, gunnercooke’s finance director added.