Due to the unstable political climate worldwide and the consequences of COVID-19 shutdowns, the economies of many countries suffered in 2022 and continue to suffer in 2023. In an effort to lower inflation rates, many banks have simultaneously raised interest rates. During these challenging times, many industries, including eCommerce, are searching for new, better solutions that can help both the company and its customers. This is where the application of blockchain technology and digital currencies can take an online retail business to the next level. Let’s talk about how cryptocurrency payments are currently helping eCommerce companies survive and thrive during periods of economic uncertainty.
- There are many signs of global recession such as interest rate hikes and decreased consumer confidence.
- Cryptocurrency market has been recovering in value amidst economic uncertainty.
- Crypto payments provide the eCommerce sector with many advantages that can help combat the impact of recession including lower fees, faster transactions, higher privacy, and wider consumer reach.
The Signs of Global Recession
The global economy is currently experiencing the sharpest slowdown since the post-recession of 1970. Compared to the early stages of previous recessions, the decline in consumer confidence has already been much more severe. The United States, China, and the EU, the three economies with the largest combined GDPs, have all experienced significant slowdowns.
Fiat currencies like the dollar and the euro power these sizable economies. Governmental policymakers have a great deal of influence over currency exchange rates and, by extension, all citizens’ daily lives. Money printing and price inflation are essential to the functionality of this system.
Advantages of Crypto in Recession
The crypto market crashed in May 2022, which was followed by low trading volumes and a loss of value for most crypto assets. However, as with the recession itself, it’s part of a regular cycle where highs are always followed by lows.
Since then, the value of bitcoin and other cryptocurrencies has begun to recover. At its height in late 2021, the cryptocurrency market cap exceeded $3 trillion. The value recovered to over $1.04 trillion on January 23 after falling to about a quarter of that level in 2022. BTC as an asset literally emerged in the wake of the financial crisis and has since proven to be resilient to crises. Bitcoin’s value grew even as physical shops and businesses closed due to the pandemic.
Bitcoin and other cryptocurrencies are designed to be a truly global currency that is not directly controlled by any bank or authority. Anyone in any part of the world has approximately the same tools to buy and sell crypto. Holding crypto thereby contributes to the global economy as a whole, not just that of a single nation.
Crypto Payments in eCommerce
The recession has had a big impact on eCommerce companies that rely on customer spending and digital payments. A business needs to adopt new strategies and increase its flexibility if it wants to succeed in a volatile economy. This is the perfect opportunity to modernize the payment process. In particular, starting to accept cryptocurrency payments can have a lot of benefits.
Even amidst a volatile market, many major retailers are adopting crypto payments. Gucci, Balenciaga, Pacsun, Lamborghini, and Starbucks are among the brands that announced they would now accept cryptocurrency as payment.
With a new target audience, a secure infrastructure, and lower transaction costs, cryptocurrency payments would help e-commerce businesses overcome the uncertainty of the global recession. Crypto is the ideal tool for the long-term protection of hard-earned savings because it can capture value from an expanding monetary system while also remaining independent of central banks.
Crypto payments offer online businesses a range of advantages over using fiat payments. They include lower or no fees, instant transactions, and smart contracts that ensure the safety and privacy of both the merchant and the customer. All payments are recorded on a shared network and cannot be reversed, which protects sellers from chargebacks. With over 2 billion people lacking access to the banking system, retailers can now also reach unbanked consumers.
As crypto becomes more widespread and accessible, new crypto payment solutions and tools become available for merchants and crypto holders.
How to Accept Crypto Payments with NOWPayments
Follow these easy steps to start accepting cryptocurrency payments with NOWPayments:
- Create an account on the official NOWPayments website using your email address and a secure password.
- Verify your email address via the code sent by email. Then you can log into your account, and access the NOWPayments dashboard.
- Select Payment settings from the Settings menu. Add the cryptocurrency wallet where your funds will be deposited.
- Additionally, you can generate the API keys needed to access plugins and API updates.
- Create a Payment link in the Payment tools. Decide on the payment method, price, and whether a fixed rate payment and a customer-paid fee are applied.
- Customers can now receive the permalink, and payments can now be made directly to your cryptocurrency wallet.
Conclusion
Crypto as an open payment system drives progress and growth even during unfavorable economic conditions. The global crypto ecosystem includes digital wallets, blockchains, and crypto exchanges, which allows for a higher level of interoperability. When eCommerce meets crypto payments, online businesses benefit from lower costs, faster transactions, and increased privacy.