What SMBs need to know about accepting crypto

Back in October – it seems like ages ago in the cryptocurrency world – the PYMNTS and BitPay study “Shopping With Cryptocurrency” found that “tech-savvy” consumers, who make up about 15% of all consumers and 22% of former or current consumers Identify cryptocurrency holders most likely to do business with them.

But now, with FTX dragging itself before bankruptcy court, other crypto exchanges shuddering, and Bitcoin hovering at $16,000, traders must ask themselves an existential question: Do I accept crypto or not?

It might make sense that given the volatility of Bitcoin and its brethren, consumers would be reluctant to use their holdings to buy goods and services. The purchasing power of these digital coins fluctuates day by day, hour by hour. It might also make sense that merchants would be concerned about not being able to see their money with the consumer do Transaction (FTX knock-on effects include governance concerns and frozen funds).

But BitPay CEO Stephen Pair and Nick Dossa, dealer principal at Vegas Auto Gallery, which processes crypto transactions through BitPay’s platform, told PYMNTS that the FTX fiasco actually didn’t change things at all. Seen through the broader lens of history, the FTX purge is nothing new.

“We’ve seen a number of events like this over the past decade,” Pair noted.

Bitcoin payment service provider BitPay decided a long time ago to minimize its reliance on external companies.

“We custodian our own crypto and do not rely on third parties for this,” Pair said.

When exchanging are uses, Pair said his firm takes crypto public, sells it, and immediately withdraws the proceeds.

Mixed consumer sentiment – ​​for now

Yes, there is some uncertainty among consumers in the market, Dossa said, and people might be waiting a bit to see how things play out. But for the Vegas Auto Gallery, which sells luxury and exotic vehicles and has offered Bitcoin as a payment option since 2015, “the people who have a lot of crypto are still moving forward” and making transactions.

Pair echoed this observation, noting that different people got into crypto at different times – and there are still several people who invested years ago and were sitting on healthy gains – or they may have converted their bitcoin to stablecoins (BitPay supports also USDC) and use these coins for shopping.

As the holiday season begins, there may be some division among crypto-holding consumers.

“You’re going to see some people who have the ‘donate or lose’ mentality,” Pair said.

But there are other consumers who want to spend when the price of bitcoin is high, and when it’s low it’s a good time to save and build wealth.

Advantage for traders

Regardless of today’s headwinds, Pair and Dossa said traders should be attracted by the fact that crypto owners are younger, more tech-savvy, and tend to be relatively wealthier than other demographics. Pair found that even during these somewhat constrained times, the average spend of BitPay’s merchant customers is twice the spend of a typical credit card customer.

There is another benefit that traders benefit from.

“If they find a place to spend crypto, they will tell their friends,” Dossa said.

Looking ahead over the next few months and longer term, the chaos sown by FTX will have the salutary effect of flushing bad actors out of the system and providing a wake-up call for investors and regulators. The big deleveraging may have started, Pair predicted, and “we will find a base and a bottom in the markets. And then we start building again.”

As he told PYMNTS, during the rebuild “many traders should consider accepting crypto. You will be pleasantly surprised at the type of buyers they attract.”

For all PYMNTS crypto coverage, subscribe to the daily newspaper Crypto Newsletter.

How consumers pay online with saved credentials
Convenience is prompting some consumers to store their payment information with merchants, while concerns about security are causing other customers to pause. For How We Pay Digitally: Stored Credentials Edition, a collaboration with Amazon Web Services, PYMNTS surveyed 2,102 US consumers to analyze the consumer dilemma and how merchants can overcome resistance.

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