Cryptocurrencies welcomed in the news, but not at the checkout

Media coverage of the Bitcoin phenomenon reached saturation point recently as the value of cryptocurrencies continues to make the news. The value of Bitcoin rose exponentially, surging 900% in 2017 and almost hitting USD 20,000 per coin, before crashing back down to less than half that figure as we write. The booming value placed on Bitcoin and other digital currencies led more and more casual investors to purchase crypto coins in the hope of seeing a healthy return on their initial outlay. 

All this hype led many to suggest that cryptocurrencies are the future of payments, and that all of us will soon be using digital currencies to pay for goods and services online, replacing the loose change in our pockets and the cards in our wallets. 

But will this really be the case? Was the reduction in value a natural equalisation or a reality check? Do Bitcoin and other virtual currencies represent the future of payments? A small but growing number of retailers – in store and online – certainly think so, upgrading their payments infrastructure to accept digital currency in preparation for this future.

However, merchants aren’t the only party dictating the evolution of the way we pay. Consumers play the most important role, making it vital that the payments sector listen to their views too. New research from Intrapay reveals that consumers are not totally on board with the idea of paying with cryptocurrencies. 

Crypto cryptic for consumers

In a study into more than 650 consumers’ ecommerce experience and their thoughts about the choice of payment methods available at online retailers, Intrapay found that direct debit, debit cards and credit cards remain the most popular method of purchasing goods online. However, demand is falling, in favour of alternative payments, including mobile payments, bank transfers, prepaid cards and, indeed, cryptocurrencies.

Nevertheless, consumer demand for cryptocurrencies, both now and in the future, falls well short of what the hysteria suggests. In fact, the alternative payment method that consumers really seemed to favour is the prepaid card. 

Consumers are over seven times more likely to buy something online using a prepaid card than with cryptocurrency, according to the survey. It revealed that just two in every hundred consumers have used cryptocurrencies to pay for goods and services in the past and only 6.5% wish to use it to make online purchases in the future.  

Meanwhile, as consumers become increasingly security-savvy, demand for prepaid cards looks set to almost double from 9% currently to 17% who wish to use them online in the future.

With all this consumer data in mind, cryptocurrencies are just not viable as a mass payment method in the current market. If retailers – online and in store – want to grow their business in the future, they must take the views of their customers into account, offering the payment options they want to use. Doing so will go a long way towards driving loyalty, engagement and conversion. 

Forcing consumers to pay via methods they don’t want to use will never help a business engage and convert customers. Instead, merchants have to listen to consumers and meet their needs with payment methods they are familiar with and like to use.  This approach will reinforce retailers’ relationships with their customers, adding long-term value to their businesses. 

Catering to other needs

As the Intrapay study discovered, apart from payment methods, consumers have opinions on a wide range of issues – particularly the balancing act between security and convenience when paying online. 

Almost 90% of respondents named security one of the most important aspects of their online payment experience. However, four in ten respondents said they wanted more convenience, with an equal number highlighting speed. 

Researchers found that 50% of consumers have dropped a purchase because the checkout process was too complex, or required them to enter too many details, suggesting the need for a better balance. 

Merchants can learn from the feedback on the payment experience from their customers. Added charges are a deal breaker – hidden delivery charges are the second-largest reason for abandoning a transaction, with more than half of respondents stating that they have given up on a purchase when faced with unexpected extra fees at checkout. 

In addition, a substantial number said they want to have greater control over their money, especially when making high-value purchases. Consumers want to be able to spread payments across the year, receiving real-time updates on their payment status. With the cost of living on the rise, they also want to receive guidance to help them budget better.

Talking to consumers

Intrapay’s research shows a shift to new, innovative alternatives, and greater transparency from merchants and their payment partners. Success here will come from close relationships between consumers, the merchant and their payment platform provider. 

Clearly, consumers have different ideas about the payments experience than some technology developers. But the consumer is in control of the payment, so it is vital that merchants listen to what their customers are saying, and work with payment specialists to build adaptive technology that caters to what consumers truly want, rather than what businesses tell them they want.

About Gareth Twist

Gareth has over 20 years’ experience in developing and expanding businesses. Within payments, he was Strategic Partnerships Director for PaySec, offering tailor-made solutions for each business unit, ensuring country-specific support and management. More recently, he had lead the development of Intrapay’s direct bank transfer technology – Intrapay Direct. Now based in Europe, Gareth heads up Alternative Payments worldwide for Intrapay. He is focused on developing new opportunities to expand the business into emerging markets, building networks and growing these new revenue streams.

About Intrapay

Intrapay, part of the Sappaya payments ecosystem, launched in 2018 to refresh the payments industry with customer-driven innovation, driven by close relationships with customers, partners and industry leaders. It provides card processing, alternative payments, credit risk and compliance, chargeback prevention and currency optimisation across international geographies. Its flexible technology is built from the ground up to accommodate detours or diversions as demanded by the global industries its clients serve. It is the sister company to cashless experience company tappit. Visit https://intrapay.com/ for more information.