Worldpay from the FIS – a top global fintech provider – recently released a joint report with CryptoKitties covering the outlook around cryptocurrencies as a medium of exchange. It got a lot of interest among both merchants and customers to use cryptocurrencies to transact in 2022.
Consumer ‘hungry’ for crypto
According to the report titled “Crypto for Payments”, there is currently a ~10X disparity between customers and merchants transacting in crypto. While 40% of customers want to use their crypto to buy things, only 4% of merchants actually accept it. In contrast, 60% of both customers And Merchants showed interest in using/accepting crypto this year.
However, actual adoption is likely to be much slower than that. The steep learning curve of crypto and the complexities of coordinating these new payment systems among internal teams will prove to be enormous challenges for institutions. Should they be dispensed with, the report claims, merchants could benefit from lower transaction fees and dispute costs while appealing to a wider customer base.
One potential contributor to the customer-trader disparity is the price volatility that cryptocurrencies are prone to. Traders may hesitate to sell their products for these assets for fear that their value may drop significantly the next day.
As such, solutions such as prepaid crypto cards from Visa and Mastercard have emerged. Users can load these cards with crypto, and use them to purchase products anywhere the payment processor’s traditional cards are accepted. Will convert each user’s funds into fiat currency on the back end, before placing them in the merchant’s account.
Currently, 65% of Crypto.com members use the Crypto.com Visa card, which clearly demonstrates the customer-side demand for crypto purchases.
The study specifically surveyed 110,000 Crypto.com customers and 1.5M+ WorldPay from FIS merchants. A similar study conducted by Visa found that 25% of small business owners plan to accept crypto this year.
Where is interest most concentrated?
Perhaps unsurprisingly, the report found that merchants are most interested in accepting USDC and large-cap crypto for payment. Customers felt the same way, but with added interest in using Crypto.com’s native Cronos token – although this is likely due to a biased sampling.
Across industries, luxury goods merchants showed high interest (80%) in accepting crypto for payment. Customer interest was more balanced between market segments, showing slightly higher interest in using crypto for travel – although traders appeared to be the least favorable in that space.
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