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Feb 29, 2020

Here to Stay, The Rise of Cryptocurrency in Online Retail

Cryptocurrencies posses real and immediate value beyond pure speculation. Being native to the internet they constitute a real alternative to traditional online payment methods. Below, an overview of the current state of cryptocurrency payments and what the future holds.

The ecosystem for cryptocurrency payments has evolved significantly over the last few years. We see more and more on and offline merchants and retailers offering cryptocurrency payment options in their checkout process. Prominent examples like Starbucks, Subway, Shopify, and Microsoft come to mind. By the end of 2017, more than 11,000 brick and mortar businesses globally were accepting Bitcoin.

Wallet adoption on the user side is increasing steadily as well. Blockchain.com reports a steep increase of Bitcoin wallets issued on its website (+100% in 2017, +50% in 2018, +33% in the first half of 2019). This platform alone reports a total of over 40M Bitcoin wallets in July 2019.

Bitcoin Wallets on Blockchain.com

Simultaneously, the number of wallets (accounts) created on the Stellar Network grew more than tenfold from January 2018 (244k) to July 2019 (3.4M).

Stellar Network Wallets by Stellar.Expert

The growing adoption on both sides of the coin -- merchant acceptance and user wallets -- is indicative of the desire for alternative payment options.

As a result, cryptocurrency payment volumes have grown to an average monthly expenditure of $190 million worldwide in 2017. Although this represents only about 0.5% of global electronic transactions, estimates show that non-cash transactions will increase at a CAGR of 10.9% from 2015–2020, with developing economies growing at 19.6%.

What does the future hold for cryptocurrency payments?

First of all, most of the statistics we see these days are bitcoin-based information. We also see a close correlation between cryptocurrency payments and the bitcoin market price. In December 2017, when bitcoin peaked at USD 20,000, consumer payments totaled USD 427 million. In September 2018, when bitcoin's price hovered around USD 6,500, payments fell to USD 96 million.

Research by Chainalysis showed that during the first four months of 2019, only 1.3% of Bitcoin transactions were merchant or retail based. In contrast, ~90% of transactions were generated by speculators. This reveals the case against bitcoin, and cryptocurrencies in general, for adoption as a major payment method: perceived high volatility, slow transaction times, and high transaction fees. With the immaturity of the technology stems a lack coherence, as sending cryptocurrencies from one wallet to another is still rather tedious.

Nonetheless, mobile payments are increasing worldwide (+60% in 2019), and among these, especially payments via e-wallets. The share of e-wallet payments is expected to grow from 18% in 2016 to 46% in 2021. The opportunities for growth are immense, and new e-payment companies will fill the gap, making cryptocurrency payments easier and more viable and risk-free than ever.

An online business solution?

COINQVEST is one of the newest enterprise payment gateways for cryptocurrencies, here to answer the shortcomings of the current payment industry. COINQVEST is built on the Stellar Network, a blockchain-based distributed ledger technology specially developed for financial transactions.

Merchants using the COINQVEST platform can now accept payments originating from the Bitcoin, Ethereum, Litecoin, Ripple and Stellar Network blockchains. We offer reduced currency exchange risks for merchants with real time automatic conversion of cryptocurrencies to fiat, minimal fees, quick transaction settlement, and chargeback protection. We also include business related services like invoicing and accounting.

Please feel free to reach out and contact us with questions or anything else COINQVEST can assist you with.

Online RetailBusiness
Stefan Schneider COINQVEST Co-Founder