Much has been said — and written — about the consumers’ readiness and desire to use cryptocurrencies in everyday commerce.
Debbie Guerra, ACI Worldwide’s executive vice president, merchant solutions, told PYMNTS that overcoming merchants’ reluctance requires a bit of education — they need to be confident enough in crypto to accept it as payment.
PYMNTS’ research shows that about 18% of the U.S. population — approximately 46 million people — would be interested in transacting with crypto. And Guerra noted that more than 40 million people had bought crypto already. Whether they treat them as investments or decide to transact with bitcoin and its brethren may depend largely on whether they can find merchants that will accept them.
On that side of the equation, she said, signs point toward a growing number of acceptance points: “Merchants are accustomed to adapting their payment methods and models in order to accept different types of payments.”
Merchants have made dramatic pivots before. Retailers and other enterprises helped spur the proliferation of credit and debit cards, and the pandemic has spurred the increasing use of digital wallets. PayPal has moved decidedly into the mainstream. Currently, Guerra noted, we’re seeing an explosion of buy now, pay later (BNPL) options — further proof that merchants will strive to meet consumer demand.
But merchants that want to offer crypto at the point of sale still face challenges, especially when integrating functionality into existing mobile and on-premise channels, Guerra said. And companies including ACI as a processing partner can help streamline those integrations.
She noted that merchants have to make their crypto acceptance visible to end consumers, letting them know they can transact securely and safely so that individuals know they now have that option.
There are also back-end considerations for the enterprises themselves, Guerra said. “Ultimately, the merchant also has to make decisions about how they’re going to receive those funds, if they’re looking for them to be converted into local currencies or fiat currencies, or if they’re actually going to be accepting and holding crypto,” he added.
There has been no shortage of headlines focused on cryptos’ price volatility, and it isn’t surprising that the wild swings of bitcoin and others are inhibiting mainstream use.
As an alternative, Guerra said, stablecoins can offer a viable option for everyday transactions that, pegged as they are to dollars or other liquid backstops, can eliminate that volatility. Merchants and consumers who opt to use other cryptos need to understand the times involved in transactions and processing, and how fluctuations may affect the price at purchase. Consumers sometimes have a 15-minute window where prices stay locked. After that, the value refreshes.
Cross-Border Crypto
Guerra said cryptos also have an appeal for cross-border, real-time payments. Tying these to blockchains increases transparency and security — with security being the crucial driver of international payments using cryptos.
That’s not to say that fraud — or at least concerns over fraud — disappears entirely. “If fraud were to occur, the most pressing concerns can be traced to worries over account takeovers,” she noted. As a result, processors need strong know your customer (KYC) systems in place for vetting merchants. Processors, then, must be hyper-vigilant that there are strong KYC processes for vetting merchants; similarly, they should build multi-factor authentication for consumers.
“Education and usage are going to be necessary,” Guerra said, in tandem, to instill confidence in crypto as a digital payment of the future, “as global and even publicly traded firms embrace the ability to facilitate merchants being able to accept crypto. It also can help build the confidence that from a merchant perspective, it’s just another payment type, and they can feel confident taking that payment.”
