Many people have argued that Bitcoin payments will have a difficult time scaling to the masses. Merchant adoption is a popular topic, as critics believe that a majority of merchants will never support crypto payments due to volatility and other fundamental risks. In a world where payments are going digital, studies are showing that merchants who accept Bitcoin payments are seeing significant growth in sales and new customers.
Bitcoin Payments Study
BitPay, The worlds largest Bitcoin payments service provider recently shared a study that outlines how merchants are actually benefitting from accepting BTC and other cryptocurrencies. A leading research and advisory outlet by the name of Forrester Consulting has sourced data based on interviews with four different merchants. In an environment where COVID-19 has altered consumer behavior, what type of advantages are these merchants seeing by incorporating Bitcoin payments into their digital infrastructure?
The Total Economic Impact
The study conducted by Forrester Consulting focused on Bitcoin payments, and how BitPay is driving adoption. It is important to note that BitPay helps merchants and businesses diversify their payment avenues. By helping these entities accept cryptocurrency, BitPay eliminates volatility risk and offers a structure where companies can reduce their costs and become borderless overnight.
Based on customer data from four different merchants, it was quite evident that merchants accepting Bitcoin payments are scaling into new horizons.
Studies show that around 40% of customers using cryptocurrency are first time customers. This is attractive in a digital economy because it shows companies that significant market share is still available to capture. Compared to customers paying with credit cards, purchase amounts in cryptocurrencies were double the amount. Lastly, aside from there being no fraud-related chargebacks, merchants also discovered that accepting cryptocurrency is actually more cost efficient than traditional credit cards.
Benefits To Merchants
Based on the findings above, the study by Forrester concluded that merchants can benefit in the following ways from accepting cryptocurrency payments:
- Generating additional revenue by occupying first-time customers that can transition into long term revenue streams. These new first-time customers prefer to use digital assets over traditional payment protocols.
- Increase transaction sizes since customers paying in crypto tend to purchase double the amount compared to traditional credit card users.
- Increased profitability as companies accepting crypto payments were paying much less in transactional costs. Even though companies would pay a small transaction fee to BitPay, this was a fraction of what they were paying on credit card transactions.
In addition to the benefits above, one of the most intriguing metrics from this study were the companies return on investment. When merchants added support for crypto payments, their ROI reportedly went up by 327%. In an environment where many businesses are struggling to stay afloat, offering support for crypto payments could provide stability.
BitPay CEO and Co-Founder, Stephen Pair commented on the study stating that:
“We believe the Forrester study confirms what we’ve known for some time now. Accepting bitcoin and other cryptocurrencies through BitPay saves merchants considerably on fees, and unlocks a whole new customer base.”