Are Cryptocurrencies Growing as a Means of Payment? Data Confirms
Consumers’ interest in purchasing and spending cryptocurrency is growing, driven by the fear of losing out on both a possible investment opportunity and a method to utilize digital currencies as an alternative to their own fiat currencies to pay for retail transactions.
We will discuss and analyse the most current trends and data on how cryptocurrencies are catching retailers’ attention and being viewed as a payment and e-commerce method.
Cryptocurrency — Trusted By Future Generations
Currently, majority do not own cryptocurrency. This is expected, since historically, technological adoption is split in cycles, this is known Everett Rogers’ technology adoption curve, and individuals embrace new technology at varied speeds, with fundamental difference being people’s psychological receptivity to new ideas.
Trust in a new technology develops with time. For example, it took decades for the internet to reach widespread acceptance.
According to PYMNTS report published in May 2021, that examined US consumers’ current interest in and future plans to own cryptocurrency, surveying over 8,000 consumers, 75% of those who do not currently own cryptocurrency site “lack of knowledge” as the main reason.
Consider the data below:
According to PYMNTS data, cryptocurrency owners in the United States are more likely to be younger, middle-income, and male. Over 19% of millennials and 15% of middle-income customers (making $50,000 to $100,000 per year) currently own cryptocurrency. Millennials and bridge millennials are the most likely to own or have previously owned cryptocurrencies. According to research, over 27% of all millennials and bridge millennials own or have owned at least one type of cryptocurrency, compared to 16% of Generation X consumers and only 5% of baby boomers and seniors.
In the UK, according to YouGov, over 15% of Brits (aged 25–49) consider cryptocurrency as a more appealing investment, beating other mainstream forms of investments, such as gold, bonds, commodities, commercial property as well as global & US stocks.
According to another survey carried out by YouGov in December 2021, when asked “Should the United States create a national cryptocurrency?” out of 4,940 of US adults, over 20% of Millennials said yes.
Data allows us to analyse that, as of now, while the majority of people do not own cryptocurrencies, which will most likely change over time, those who do are relatively young and represent future generations. Today’s teenagers and young adults are the first generation to have grown up online, and the notion of digital money may seem second nature to many of them.
Crypto — Means of Payment?
Consumers are increasingly accepting cryptocurrency as a secure payment alternative, according to data. Millennials have a particularly strong demand for and interest in utilizing cryptocurrencies for everyday transactions.
According to a PYMNTS survey, two-thirds of current and former cryptocurrency owners in the United States acquired cryptocurrencies to conduct transactions, and 93% of cryptocurrency owners would consider doing so in the future. According to research, 12% of customers (about 30 million) already hold one or more cryptocurrencies, 4.5% (11.5 million) previously owned them, and 17 million non-owners may acquire cryptocurrency in the near future.
Consider the data below:
Nearly a quarter of current or former cryptocurrency owners have used cryptocurrency to purchase groceries and retail products as well as to make online gaming or gambling-related purchases.
Travel and leisure (62%), real estate (60%), professional services (58%), furniture and appliances (57%), and financial services are the top five things current and previous millennial cryptocurrency owners would contemplate paying for using cryptocurrency.
In UK, according to FCA consumer research report (June 2021), the number of people who own cryptocurrency is about 2.3 million, or 4.4% of the population (up from 3.9% last year), with almost 20% of them buying cryptocurrency in order to purchase goods or services.
Cryptocurrency as a Means of Payment — What Do Businesses Think?
According to a survey conducted by Mercuryo, a London-based company, involving over 500 senior financial decision-makers in the UK, with 40% of the survey consisting of board or director level management, and the rest being partners or business owners, 58% of respondents believe that crypto can significantly improve the payment experience and reduce costs. Over 45% of businesses feel that cryptocurrencies represent the future of payments, with three out of five reporting increased customer/supplier demand for a crypto payment option.
Despite the fact that numerous payment technologies are now accessible and being utilized by businesses in the UK, 68% of respondents report flaws in their domestic payment methods. When it came to cross-border money transfers, 74% of the organizations we polled identified particular issues.
When asked what was preventing businesses from adopting cryptocurrency, the most common response was a lack of regulatory clarity, which was given by 33% of respondents.
Many people’s behaviors are formed by their community, either via encouragement or by peer pressure. As a result, social attitudes about crypto-shopping are just as essential as customers’ individual beliefs.
Gemini, a US-regulated cryptocurrency exchange, founded by Winklevoss twins, has partnered up with Flexa, another US start up, that enables digital asset (crypto) acceptance using existing point-of-sale (POS) hardware and software, to launch Gemini Pay. Using Gemini Pay app customers can now spend their crypto at more than 30,000 retail locations across the United States. In short, when it’s time to make a purchase, app generates a unique barcode called a “flexcode,” which participating retailers can scan to authorize and guarantee transactions instantly. Flexa then pays merchants in either convertible virtual currency or their fiat currency of choice. Meanwhile, Flexa’s Spend SDK deducts the equivalent amount of crypto (Bitcoin or USDC) from the digital wallet within the app.
Some of these retailers include Whole Foods, Bed Bath & Beyond, GameStop, Office Depot, Petco, Ulta Beauty, and The Coffee Bean & Tea Leaf.
AMC & Regal Cinemas
AMC CEO Adam Aron confirmed that theaters will accept Bitcoin, Ethereum, Litecoin, and Bitcoin Cash as valid payment options.
Regal Cinemas, which boasts over 7,000 screens in over theaters across the country, will allow patrons to use digital currencies including Bitcoin, Dogecoin, Ethereum, and Litecoin. The cryptos can be used for both ticket sales and concession purchases.
Although Starbucks doesn’t accept Bitcoin or other cryptocurrencies directly, the Bakkt App allows users to convert cryptocurrency — along with “supported loyalty and rewards points” and frequent flyer miles — into U.S. dollars, and then put that value onto the Starbucks card that is saved in the Starbucks app.
AT&T announced in 2019 that it was the first mobile carrier to accept cryptocurrency payments. It does so through BitPay, a third-party payment processor. Customers can select BitPay when they check out using Bitcoin and other cryptocurrencies.
Philipp Plein, a German fashion designer, became the world’s first fashion company to accept payment in 15 different cryptocurrencies.
Shopify, an e-commerce giant, that reported that it had more than 1,700,000 businesses in approximately 175 countries using its platform as of May 2021, accepts cryptocurrencies as a form of payment on its website, meaning that any merchant operating via a Shopify store can accept Bitcoin, Ethereum, Litecoin, amongst 300+ digital currencies.
Lush, a British cosmetics retailer, started to allow bitcoin payments for orders on its website through a partnership with Bitpay.com. It now accepts cryptocurrencies as a form of payment directly on its website.
As one of the largest software companies in the world, it is significant that Microsoft accepts Bitcoin payments, going some way to instill a degree of confidence in using cryptos. Redeemed for credit in topping up user accounts, Bitcoin can be used to pay for an array of services, including Xbox Live and Skype.
Pavilion Hotels & Resorts
Hong Kong-based Pavilion Hotels & Resorts group has also become the first international hotel chain to embrace virtual currency payments.
The group — which owns properties in Amsterdam, Madrid, Lisbon, and Rome as well as Bali and Phuket — will accept bookings using 40 different cryptos, including Bitcoin and Ethereum from July through their partnership with payment platform Coindirect.
The insurance broker behemoth will allow customers in Switzerland to use Bitcoin as a payment option for their bills. Customers will now have a reference code printed on bills for non-life insurance policies in order to pay their premiums through crypto exchange Bitcoin Suisse which will then convert them into Swiss Francs.
LOT Polish Airlines is now accepting crypto payments, meaning the digital currencies can be used for flights to over 60 global destinations.
Travel giant Expedia is one of the most prominent travel agencies to accept Bitcoin through its partnership with crypto-friendly travel booking platform Travala. You can now book 700,000 hotels from the website’s listings with more than 30 different cryptos, including Bitcoin.
All of the above is not an exhaustive list, there are a growing number of companies across a plethora of industries — from big tech to small independents — who are embracing cryptocurrencies, allowing customers to use them as an official method of payment for their goods and services. Considering the fact that cryptocurrencies have been only around since 2009 it’s nothing short of an amazing achievement.
DISCLAIMER: The information contained in this article is for educational purposes only and does not constitute any form of advice or recommendation by Wheatstones, and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.
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