Bitcoin and cryptocurrencies are surprisingly still on the ‘high-risk’ list for traditional banks and the question whether banks will “get on with it” and start incorporating cryptocurrencies is one that has become a hot topic recently.
In the news regarding cryptocurrencies
With the pandemic taking a strong position in altering a great number of the way people bank, not to mention the recentclosure of 82 HSBC branches throughout the UK, the use of cryptocurrencies has become more important to people than ever before.
Only three months ago, Cornerstone’s customer research found that about 15% of Americans use some form of cryptocurrency such as Bitcoin. The price reached $40,000 and, though it dropped by 25%, it regained its position in two days, which is positive news for Bitcoin owners and users, and indicates that cryptocurrency will show a great increase in the months to come.
Cornerstone also estimated that in 2020 customers in the retail market purchased more than $30 billion using cryptocurrencies.
Still, the question is, will these notable trends help shift the mindset of banking institutions to start providing crypto-related services?
In the meantime, why wait?
Why wait for your traditional banks to “get on” with cryptocurrencies when you can start right now and begin tapping into a market that already saw 30 billion USD spent in retail purchases using cryptocurrencies last year?
From a banking institution’s point of view, cryptocurrencies are still considered a high-risk enterprise; but what they are failing to see is that customers around the world are continually seeing value in this currency. The benefits outweigh any notions of high risk as banks may see them. Moreover, it seems to be the same old story of “change is bad”.
The benefits of using cryptocurrencies
There are typically five main benefits when using cryptocurrencies, but one other important benefit is for merchants to start accepting Bitcoin in order to satisfy the growing number of customers who prefer using cryptocurrencies.
Here are the best reasons why cryptocurrencies are beneficial:
- Fraud
Cryptocurrencies are digital. This means they cannot be counterfeited. Also, payments cannot be reversed, which will help decrease the chargeback ratio most merchants experience with credit card transactions.
- ID Theft
Bitcoin and other cryptocurrencies use what is termed a “push” system. This means that only the information the sender wants the payee to see will be sent; whereas, with credit cards, a “pull” system is used in which identity theft is possible to occur.
- Immediate Settlement
Often other parties are involved when it comes to making payments. These may include lawyers, notaries, etc., but with cryptocurrency payments it is immediate and does not involve any other party to ensure the payment is made.
- Access to Everyone
Even for people outside of first-world countries have found it more convenient to use digital payment solutions. In Kenya, the M-PESA project has boomed, reporting over one third of Kenyans now having Bitcoin wallets.
- Lower Fees
Traditional banking services always require a third-party fee for all transactions. Although cryptocurrencies have fees attached, the fees are lower. Banks have other overheads to consider as well as a larger employee base, which make their fees far higher than cryptocurrency transactions.
What experts think
When asked about the forecast for 2021, Forbes Magazine published an interesting article on 18 January 2021 in which senior contributor for FinTech news, Ron Shevlin, investigated and reported that banking institutions are likely to start using the following five new technologies, as revealed by Cornerstone.
- Digital account opening
- Application programming interfaces (APIs)
- Video collaboration
- P2P payments
- Cloud computing.
What this means for merchants is simple: as the publication reports, “…If you want to know which technologies are hot in banking, you should do the same. The truly “hot” technologies in banking are the ones that financial institutions invest in—not necessarily the ones the pundits talk about.”
iPayTotal stands by this in its own estimation, especially after the global pandemic, in which consumers’ needs will dictate the way banking is performed, and most especially how payment processing is done.
Merchants who want to start accepting Bitcoin payments should start now, and in so doing, offer a wider service to their customers. — Allow the leaders in payment solutions to help your merchant account start accepting cryptocurrencies by calling iPayTotal on +44 800 776 5988.
