The Impact of the Bitcoin Revolution on ecommerce Industry
Bitcoin trading is a rapidly growing trend all over the globe, and so is the ecommerce business. The instantaneous process, better security and absolute zero intervention of any financial institutions over digital currencies make it a better and preferred option for many consumers. On the other hand, the towering competition in e-commerce industry is transforming its accessibility to a new level of excellence like we’ve never seen before.
How is Bitcoin, a digital currency, transforming the e-commerce industry?
Before that, let’s know how the current fiat money system works for e-commerce platforms.
There is central government system that regulates the money supply for every country. Due to various political, market, and economic factors in global commerce, powerful currencies such as Euro and US Dollar are widely accepted, whereas the opposite goes for less dominant currencies such as Indonesia Rupiah, Argentina Peso, and others.
Therefore, there is foreign exchange market where individuals can switch between different currencies with prefixed fees determined by banks for those transactions. The money transfer limits, regulations, and fees vary for each country depending upon politics.
The credit card transaction fee for e-commerce merchants starts from 2-3% in developed countries and can go high up to 5% in some counties. There are also fears of chargebacks and fraud responsibilities to worry about beyond these merchant fees. The money transfer process is even time taking (takes 3-4 business days or more), depending on your bank’s discretion.
Bitcoin Simply Eliminates All of These
Bitcoin is a highly secured digital currency, not regulated by any fiat monetary system. It simply allows its users to move value around the World Wide Web, separating it from the functions powered by any government or financial institution. An individual or entity simply has to sign up for a Bitcoin wallet, and they can enjoy the access of instant peer to peer transactions, no transaction fees, and worldwide payments. Unlike a fiat currency, no central government or money institution will own the slightest control over the Bitcoin transaction.
How Can E-commerce Consumers Get Benefit with Bitcoin?
Due to risk profiles and improper access to available payment gates such as PayPal, bank, and other third-party payments, still, a large number of global population is excluded from participating and enjoying the benefits of online commerce. With a Bitcoin wallet, buyers can easily avoid foreign exchange fees while buying products overseas. Fiat money transferred to digital currency can be transferred to any corner of the world without any restrictions.
Since Bitcoin wallet is completely digital by nature, it allows users to save and back up multiple copies of the same wallet. It also allows retrieving complete user data by any chance users lost their wallet. Even for high-security purposes, Bitcoin wallets can only be accessed with the private key of the user.
Benefits for Ecommerce Merchants with Bitcoin Transaction
Chargebacks: Chargebacks are the scariest nightmares for e-commerce merchant, where consumers order or purchase a product and after a successful transaction calls their payment institution or bank to cancel it after days, weeks, or even months later. While this function is originally meant to protect consumers from fraudsters, but in many cases, the function is greatly abused which cause inventory loss and also the payment flagged by the monetary institution for the e-commerce merchants. The reversal of the transaction may take weeks and even months with additional paperwork, evidence gathering, manpower, and last but not the least stress.
Zero Processing Fee: Another downside of fiat money transaction in e-commerce world is the conventional credit card fees which can start from 2-3% to the merchant and can increase depending upon the terms fixed by the bank. For small business modules, even these 2-3% additional charges can add a lot to the end result over time. Thanks to Bitcoin’s zero physical location, holdings, banking fees, limits, and delays, it can be transited to any country within just 10 minutes.
Wire Transfer: As e-commerce businesses are mostly working with overseas suppliers, they mostly don’t have any bank account or third party transaction bridges. That means, every time e-commerce merchants put in an overseas order to their inventory, they have to spend an international wire transaction fee which may range from $25-$40 USD. This definitely can add up a significant amount for merchants if they have a number of overseas suppliers.
Protection over Frauds: Due to PCI compliance & fraud protection, merchants have to carry additional costs for multiple financial compliance regulations and security checks for accepting credit cards. Compared to this, although Bitcoin transaction requires wallet security on both merchant and payer sides, here neither payer nor the merchant has to carry out any kind of additional charges or processing fees.
Multi Signature: Due to its open source ecosystem for programming, developers, and entrepreneurs, merchants can easily create excitingly new services, apps, and products on Bitcoin platform. The applications required for this function can be widespread with custom triggers and scripts from the transfer of assets, contracts, delivery of product, etc.
Better Mobile Shopping Experience
Bitcoin or any other available digital currency can highly promote the overall mobile shopping experience for the users in the simplest manner. All they have to is fill their Bitcoin wallet with coins available on online exchanges or from brokerages by transferring fiat money from their regular account. Once they have Bitcoin or fractions of it in your wallet, all they have to id open the designated mobile app and simply scan the QR code to pass your transaction. It will automatically unlock the embedded secret password to your Bitcoin password, and the whole process will just take a few seconds of time.
The Sweet Relationship Continues…
The relationship between e-commerce and Bitcoin is really evolving, and hopefully soon reach a more rewarding point where both merchant and buyer will get more benefits from it. Whether the ease of money transfer, less paperwork involvement, highly secure, the efficiency of currency type transfer from one to another, or other above mentioned benefits over traditional money transfers; digital currencies like Bitcoin are helping both private users and online merchants to experience a whole new world of monetary exchange with complete ease.
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