How Crypto Can Enable E-Commerce and Merchant Payments

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One of the many lasting impacts of the pandemic has been the resounding shift to e-commerce. From basic household items to luxury goods, shopping online during lockdown has now become the new normal for consumers around the world. This shift also impacted the adoption of non-cash retail payments in emerging markets, which grew by 25% CAGR between 2018 and 2021.

An estimated 22% of all sales take place online, and Morgan Stanley projects the total e-commerce market could grow from $3.3 trillion to $5.4 trillion by 2026. In a well-developed payment infrastructure like South Korea and the United States, sales could reach 45% and 31% of total sales, respectively, in the next five years.

For companies looking to capitalize on this opportunity, crypto can help e-commerce businesses expand into new markets, attract new customers, and streamline global transactions to increase profitability.

Improve experience and reach

While online shopping options may seem ubiquitous and sophisticated, the reality is that the e-commerce industry has plenty of room to mature.

From core payment operations and infrastructure to end-user experience, businesses have the opportunity to achieve significant improvements in efficiency and customer engagement. Crypto can address both of these facets.

At the highest level, accepting crypto as a form of payment can attract new customer segments and help differentiate a brand. It can signal a commitment to innovation or, as recently launched by Tag Heuer, Gucci and others, a luxury brand catering to a broader consumer base interested in crypto. Research shows that around 60% of crypto owners would prefer to use digital currencies for online purchases, making crypto cash management even more urgent for e-commerce businesses.

On the other end of the spectrum, giving customers the ability to transact with crypto can allow sellers to better serve unbanked and underbanked populations, as these transactions can take place through a digital wallet on a phone. mobile, in seconds, anywhere. in the world. This type of non-banking service is gaining traction in emerging markets like the Philippines, Indonesia, and Vietnam, where digital wallets are the primary payment method for e-commerce.

Save time and money

Traditional payment processing can be slow and costly for sellers, as traditional payment rails take days to fully clear and payment provider fees eat into margins. Cryptography can alleviate these burdens and help make payment transactions easier for merchants while better serving customers through reduced fees and transaction times.

Unfortunately, these challenges increase exponentially for international transactions and in cases of high volume, low value sales. For the latter, e-commerce sellers can lose a large portion of their revenue due to multiple transaction fees, putting them at a disadvantage compared to larger players or those with higher value sales.

Faster and more affordable crypto payments can turn these liabilities into areas of strength, helping sellers to be more competitive and improve their margins. Processing fees can be reduced by up to 70% with crypto payments, generating savings to pass on to customers to undersell the competition or be retained by the business as additional profit.

Crypto payments can also be much faster than traditional payments, especially for cross-border payments. Additionally, the decentralized, trustless, and immutable nature of blockchain technology can significantly reduce the risk of fraud, improve payment accuracy, and even inventory management, thereby generating more time and cost savings to increase results. .

Powering Crypto Payments with Liquidity Hub

Designed to help businesses looking to bridge the worlds of crypto and fiat, Ripple Liquidity Hub is a turnkey solution that supports crypto payment and acceptance solutions.

Available 24/7/365, it uses smart order routing to source crypto at optimized prices from market makers, exchanges, and OTC desks, dramatically reducing transaction costs. global transactions. And because Liquidity Hub sources from multiple locations, it helps optimize pricing and supports liquidity pool redundancy.

Ultimately, Liquidity Hub simplifies the way businesses buy, sell, and move digital assets. Its simplified API and intuitive dashboard make it easy to deploy and manage, helping organizations avoid increasing headcount or budget for crypto-specific support.

For merchants looking to capitalize on today’s e-commerce economy to accelerate growth and increase profitability, Ripple is a trusted partner to hundreds of businesses and financial institutions in over 50 countries with 10 years of proven experience in crypto and finance.

Learn more about how to transform e-commerce with crypto.

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