Cryptocurrency has become a force to reckon with in recent years, gaining significant momentum across various industries. One area where its impact is clearly visible is the global marketplaces and e-commerce platforms. As the adoption of digital currencies continues to rise, more and more consumers are turning to cryptocurrencies for their online purchases.
Mykhailo Romanenko, the co-founder of the global fintech ecosystem and crypto exchange ecosystem Kyrrex, explores the extent to which crypto is integrated into global marketplaces and e-commerce, focusing on the percentage of cryptocurrency transactions during crucial shopping periods like Black Friday, Cyber Monday, and the Christmas season.
Historically, e-commerce platforms primarily relied on traditional payment methods such as credit cards, PayPal, and bank transfers. However, the surge in cryptocurrency popularity has paved the way for its integration into online shopping experiences.
Cryptocurrencies offer several advantages, including increased transaction security, lower fees compared to traditional payment systems, and the ability to facilitate cross-border transactions seamlessly. To cater to the growing demand from cryptocurrency users, many global marketplaces and e-commerce platforms have started integrating cryptocurrency payment gateways.
Companies like Shopify, WooCommerce, and Magento have recognized the potential of this technology and offer plugins or extensions that enable merchants to accept payments in cryptocurrencies seamlessly. This integration not only expands payment options for consumers but also provides businesses with a broader customer base.
While the integration of cryptocurrency into e-commerce is undoubtedly expanding, it is essential to analyze the percentage of cryptocurrency transactions during main shopping periods. Let's focus on three major shopping events: Black Friday, Cyber Monday, and Christmas.
Before diving deeper into use of crypto during specific shopping periods, let’s look at the main benefits of accepting crypto payments in global marketplaces.
One of the benefits includes lower transaction fees. Credit card companies and payment apps like Stripe or Square charge transaction fees anywhere from 3-5% on each transaction. Many eCommerce companies build these fees into their online store prices.
Cryptocurrency transactions often don’t have fees or are as low as 1%. However, cryptocurrency conversion fees exist when transferring cryptocurrencies to national fiat currencies like USD.
Another customer benefit cryptocurrencies have is the privacy of personal information. Crypto payments allow anonymous online purchases by using encrypted wallet addresses. Besides, contrary to popular belief, developers built cryptocurrency’s blockchain technology specifically to reduce fraudulent activity.
By accepting cryptocurrency, money is exchanged immediately, it cannot be rescinded, and it cannot be forged; therefore, the ability to make fraudulent chargebacks or returns is drastically reduced.
Adopting cryptocurrency means you’re opening yourself to international clients. As time goes on, most users will smoothly move on to using cryptos. Adopting cryptocurrency gives all clients more options to pay while also adding another layer of security to their data.
Is Black Friday the Spark for the Crypto Momentum?
Black Friday is renowned for being the busiest shopping day of the year, with consumers looking for the best deals and discounts. While the majority of purchases are still made using traditional methods, there has been a noticeable increase in cryptocurrency transactions.
While it’s true that a significant number of retailers are yet to embrace native digital currency payments, this year crypto gift card platforms were offering inventive ways around this roadblock. The heightened consumer optimism might translate into increased trust in risky assets like cryptocurrencies, prompting some investors to allocate funds to these digital assets.
The exponential rise in overall spending cannot be understated; the arrival of cash in the market signifies increased liquidity and disposable income. While some might indulge in retail therapy, others might divert a portion of their surplus funds towards alternative investments like cryptocurrencies.
This injection of liquidity can temporarily impact crypto markets, potentially leading to price fluctuations and increased trading volumes.
While the correlations between Black Friday deals and crypto market movements exist, they are multifaceted and not definitive. The crypto market is incredibly volatile and influenced by numerous factors beyond consumer behavior during a holiday sale.
Factors like market sentiment, regulatory changes, technological advancements, and geopolitical events play pivotal roles in shaping crypto prices.
It's imperative for investors to conduct comprehensive research and not base investment decisions solely on short-term events like Black Friday sales.
While there are annual deals for crypto payments, it is interesting to note that this year there was a 19% rising concern about the wallets’ safety due to concerns about the security of payment on websites and online frauds. As shoppers seek holiday deals on Black Friday, scammers are poised to exploit the opportunity through scam e-commerce websites and phishing pages.
While scammers employ cookie-cutter methods and open-source tools to scale their operations, businesses may use these patterns for potential detection.
Despite the use of open-source tools, scammers also employ sophisticated methods for disseminating scams, cashing out victims' crypto wallets, and stealing victim data.
Cyber Monday, dedicated to online shopping, has witnessed a similar trend in terms of cryptocurrency integration. As consumers seek convenience and security in their online purchases, more merchants have started accepting cryptocurrencies.
Now, when we embark on the Christmas season, which is a significant period for retailers worldwide, we can witness increased consumer spending. Cryptocurrency usage during this season has been steadily rising, with more people viewing it as a viable payment option. In 2022, it was estimated that approximately 5% of total Christmas season purchases were made using cryptocurrencies.
In 2022, the total crypto payments were valued at US$ 1,150.3 Mn at the end of 2022 and is anticipated to exhibit growth of 12.8% in 2023. The final data will be available in the post-festive time.
‘Tis the Season to Use Your Crypto Wallet
The driving force behind the rising usage of crypto during the Christmas season is the growing number of merchants that are now accepting digital currencies. E-commerce platforms, marketplaces, and brick-and-mortar stores have recognized the potential benefits of including cryptocurrencies as a payment option.
This inclusivity not only expands the options for tech-savvy shoppers but also allows merchants to tap into a new customer base and potentially increase their sales during this festive period. As the acceptance and usage of cryptocurrencies continue to grow, an exciting trend is emerging - the integration of crypto into Christmas traditions.
Some individuals are opting to donate fractions of their digital currencies to charitable causes during the holiday season, spreading the spirit of giving beyond physical gifts.
Others are using cryptocurrencies to purchase unique and innovative Christmas decorations or digital content, adding a touch of blockchain magic to their celebrations.
Note that crypto brings more opportunities to expanding the e-commerce sector:
● Untapped markets with a rising number of internet users and e-commerce activities provide opportunities for crypto payment gateways to expand their reach.
● Collaboration between crypto payment gateways and e-commerce platforms, financial institutions, and technology providers can enhance the adoption and usability of such solutions.
● If cryptocurrencies achieve greater mainstream acceptance and regulatory clarity, it could lead to wider adoption of crypto payment gateways.
● Crypto payment gateways can play a role in providing financial services to the unbanked and underbanked populations, particularly in regions with limited access to traditional banking services.
While the rising usage of crypto during the Christmas season is undoubtedly a positive trend, it is still in its early stages. Digital currencies represent a small percentage of overall holiday transactions.
However, as awareness, adoption, and infrastructure continue to improve, we can expect this figure to rise in the coming years. As we navigate the future, it is essential to remember that the choice of payment method, whether traditional or crypto-based, ultimately lies with the individual consumer.
The rising usage of cryptocurrencies during the Christmas season reflects an evolving consumer landscape where people are embracing the benefits and possibilities that digital currencies offer.
So, as you embark on your Christmas shopping journey, don't be surprised if you come across the option to pay with cryptocurrencies. Embrace the magic, dive into the world of blockchain, and discover the joy of a crypto-inclusive Christmas season.
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