Discussions surrounding cryptocurrency payment platforms have captured the attention of investors worldwide, specifically on whether digital currencies are useful in the retail sector. For instance, the growth and widespread adoption of ‘stable-coins’ has nudged 20,000 merchants to accept crypto payments. The list of parties interested in crypto-transactions, however, is not merely limited to small businesses; we have seen that corporations like Microsoft, Overstock, Namecheap, Starbucks, Whole Foods, CheapAir, Travala, and Expedia have all shifted their attention.
The $250 Billion crypto payment market, though broad, can be best understood by examining three major categories: P2P Retail Payments, Crypto Custody, and Merchant Plugin and Gateways.
Square’s Cash App is a leader In P2P Crypto Retail Payments and since January its stock value has risen by 148%. One explanation for CashApp’s popularity may be attributed to Bitcoin, as the platform allows its users to buy, sell, and transfer it. This is especially significant, as it has been consistently demonstrated that younger users’ favour this means of payment. As a result, Square’s Bitcoin gross profit jumped by 711%.
Besides, Square is currently testing a service that allows users to obtain small, short-term loans. Offering small loans is expected to broaden Cash App’s lending efforts, and could eventually become a more complete financial payment solution when compared to PayPal. Whether successful or not, this attempt to explore possibilities by Square is an indicator of its willingness to expand their business model.
Just as important to analyse, however, are Cash App’s competitors. For instance, Coinbase offers its members the ability to borrow cash against their Bitcoin holdings, and is preparing an IPO to launch a waitlist for customers. Other key competitors like Venmo and Zelle have furthered their respective lending programs, suggesting that they too see the potential of P2P payment platforms. Yet the main difference between Cash App and its competitors lies in its Bitcoin transactions and growing lending schemes.
BitGo operates in the crypto-sector as a security and digital-asset trust firm. One distinctive feature offered by BitGo is ‘Wrapped Bitcoin’, an ERC-20 token with a 1–1 peg to Bitcoin. It currently secures 46,000 BTC, worth more than $500 million through custodial patchwork. Yet the Palo Alto-based company hasn’t stopped there; its product portfolio has expanded to offer institutional digital asset lending services. BitGo is currently lending Bitcoin (BTC), Ether (ETH),Litecoin (LTC) and stablecoins.
In its most recent endeavour, BitGo has applied to become a qualified crypto custodian in New York State. As such, they expect “a dramatic increase in market demand for its products and services from banks, pension funds, hedge funds and other fiduciaries”, according to an announcement published on August 25th.
Yet another area of growth within the industry are gateway platforms that enable merchants to accept cryptocurrency payments in exchange for their services. That’s where Cyclebit comes into play.
Cyclebit offers zero-fee tools to retailers, allowing them to accept cryptocurrencies for in-store, online, and on-the-go purchases. We host 20 of the most popular cryptocurrencies, connecting merchants to a broader customer base. The company is currently processing 1 million transactions a month, featuring a $1 billion annual turnover.
Cyclebit is one of the largest mPOS and e-commerce software providers in Eastern Europe, with a range of solutions being used by the largest insurance, logistics and retail businesses in Canada, USA, Thailand, Vietnam, Japan and Europe. Among the company’s clients are online marketplaces, insurance and logistics companies like Ozon, Lamoda, Delivery Club, Pony Express, and DPD.
Included in its product suite is ‘Cycle-Online’, an innovative e-commerce solution for processing online crypto payments. It allows users to accept crypto payments anywhere in the world with full protection against volatility, chargebacks, and ID theft.
Another solution is the tap2go application, designed to allow any Android smartphone with an NFC module to act as a terminal for receiving contactless payments. The app complies with PCI DSS Level 1 security standards, and thus has immense potential on CIS markets like Russia, where payments using Google Pay, Apple Pay and Samsung Pay now make up almost 80% of all contactless transactions.
Despite the many benefits of crypto payments for merchants and consumers, including limited fees, improved privacy, and diminished reliance on centralized authorities, there remain barriers to overcome. Taxation or liquidity barriers for smaller-cap crypto projects are but two examples. What remains clear, however, is the enormous potential of the industry available for the players who enter first. For now, analysts wait in anticipation to see who will succeed.