New report: crypto is put to the test

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The debate over whether cryptocurrencies are an investment or usable digital money is starting to narrow as payment use cases gain momentum, especially in cross-border B2B.

The Cryptocurrency Payment Opportunity: Fostering the Adoption and Use of Crypto Worldwide, a PYMNTS and i2c collaboration, addresses the finer points of the problem. A key point of the report is the efforts to overcome crypto frictions on the payment path.

“If you look at the traditional methods, it was either to find that a trader who accepted [crypto] or go through this incredibly long process to access a service like Coinbase or Uphold, convert your crypto to fiat, send your fiat to your bank account [and] it may take two to four days, ”said Matthew Goldman, vice president of sales and partnerships for crypto card company Apto Payments.

“So it’s in your bank account and now you can start spending it.” “

Goldman added that “what we’ve been able to do with our encrypted debit cards… is connect this wallet directly to the card. You still convert your cryptocurrency to fiat currency to spend it, but we can allow this to happen mostly in real time, efficiently, or on the same day.

It is an example of the innovation that drives the use of crypto for daily payments. However, as the report states, “Traders of all sizes also need to be able to accept cryptocurrencies as quickly and easily as more traditional forms of payment. This puts pressure on payments players to take the friction out of the experience ”in order to make merchant acceptance as transparent as other methods.

Get the Study: The Cryptocurrency Payment Opportunity

Payment deadlines are decisive

Noting that “companies seeking to globalize are particularly interested in [cryptocurrencies] as they look for solutions that can help them alleviate the problems associated with cross-border B2B payments, ”the report says, according to the report, there is still testing to be done before cross-border digital currencies can evolve.

Pavel Matveev, CEO of Multi-Currency Digital Wallet and Money Transfer Service Wirex told PYMNTS that “[With] traditional payment and banking infrastructure, payment time is a big problem. [The timing] really depends on the currency, but with digital [assets] you can sit in as often as you want. You can even set once per hour, per 10 minutes [or per] minute, and that’s obviously a huge improvement over traditional rails.

Blockchain transparency adds a level of trust, he said, which is useful for AML / KYC compliance.

However, “Convincing companies that remain skeptical about the benefits of cryptocurrencies to embrace them is only part of the challenge, however. The cryptocurrency payments space, especially when it comes to cross-border transactions, continues to grow and regulations regarding digital assets and the technologies that support them continue to evolve. “

Read: The cryptocurrency payment opportunity

Regulatory obstacles remain

Despite the uncertainties surrounding the asset class, cryptocurrencies have captured the imaginations of financial services companies, consumers and businesses, fueling the growing interest they are garnering.

According to the report, “Consumers find the potential benefits of cryptocurrencies intriguing, and the lingering economic impacts of the global health crisis may have prompted more people to consider these alternative currencies. A recent study of the Bakkt digital asset market found that 48% of U.S. investors bought cryptocurrency in the first half of this year, with a further 32% planning to do so within six months.

While 2020 estimates indicate that more than 2,300 U.S. companies now accept Bitcoin as a payment method, and early adopting financial institutions (FIs) could gain an advantage if crypto goes mainstream, challenges remain to generalize. acceptance of crypto payments.

“Changing regulations, the availability of key digital infrastructure and trust can hamper the adoption of cryptocurrencies,” the report says. “As a result, international companies wishing to make cross-border B2B payments via cryptocurrencies could face significant hurdles, which means banks need to carefully consider the trends surrounding virtual currencies around the world. Eliminating sticking points is key to the growth and adoption of cryptocurrencies globally. “

Download: The cryptocurrency payment opportunity

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NEW DATA PYMNTS: DIGITAL BANKING STUDY – THE BATTLE OF BREWING FOR WHERE WE WILL BANK

By the way: Forty-seven percent of U.S. consumers avoid digital-only banks due to data security concerns, despite considerable interest in these services. In Digital Banking: The Brewing Battle For Where We Will Bank, PYMNTS surveyed over 2,200 consumers to reveal how digital-only banks can boost privacy and security while providing convenient services to meet this unmet demand.

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