What the hell is crypto and how will it affect global commerce?


I’ve always been interested in technology and innovation and, specifically, how new technologies can impact the quality of people’s lives.

For the past 10 years, my career has been dedicated to digital, omnichannel and ecommerce. I’ve worked in the most recognised, largest and well- known companies in the world.

Last year, I’ve decided to make a radical shift, and I’ve joined a leading cryptocurrency start-up as their VP of Global Partnerships.

People always ask me why is blockchain so fascinating and why should they even be interested in cryptocurrency payments.

To demystify the concept, I wrote an article on Medium a few weeks ago to explain my view on how these technologies are going to make an impact on the economy and, specifically on ecommerce.

I was really glad to see how many people have read the article, so I’ve decided to write a shorter version accessible for everyone here.


Let’s start from the beginning!


Business has gone through a revolution in the last few years. From blockchain, and FinTech to AI and cryptocurrencies the world of international commerce is moving faster than ever. But, all of these emerging technologies focus around one powerful concept: E-commerce.

The business of the future is done from a mobile device or a computer. It happens at home and on the go. The shop is open 24 hours a day and customers are demanding more from their platforms than ever before. Welcome to the new world of buying and selling online.

Leading the Way with E-commerce

In 2017 alone, E-commerce was responsible for around $2.3 trillion in sales. The market is expected to hit $4.9 trillion by 2021. The digital marketplace is growing, and the future belongs to the businesses that can stay ahead of the curve.

Meeting the Customer on Their Terms

One of the biggest changes in buying and selling online is the customer’s access to information. Whether you’re a merchant selling your products globally or locally, your customers can find you with a couple of clicks. They have access to information more than ever before. While this makes for a more knowledgeable customer, it can also become a barrier between finding and buying.

Savvy E-commerce platforms integrate tools that allow customers to access information as a part of the buying process.

Buying on the Go or at Home 24/7

Conducting research isn’t the only change that merchants need to understand. New customers also prefer to make their purchases from their mobile phones or tablets. A whopping 72 percent of E-commerce sales will take place on a mobile device by 2021.

This is an exciting time for E-commerce merchants that are prepared for the next generation of customers.



Wider Reach. More Customers. Better Business.

Years ago, main street stores could only benefit from the customers in their neighbourhood. Back then it was all about location, location, location. The size of the market was determined by how busy the main street was. But the internet has changed everything. Now, even small alley stores can sell worldwide.

On top of that, independent sellers don’t even have to worry about the hassle of setting up a traditional business. With online storefronts like Shopify, Amazon, or eBay anyone can start selling with just a couple of clicks. These low-cost platforms mean that everyone has a chance at becoming a global business.

We are witnessing the rise of a new wave of not only customers, but merchants. Both of these groups need reliable payment platforms to connect and grow.

Difficult Business of Doing Business

While E-commerce has changed rapidly, online payments have stayed relatively stationary.

Most sales are processed through traditional methods like debit and credit cards. While this has been a decent medium of exchange for many years, new technologies are offering new options from additional payment systems.

High fees are an obstacle for businesses in the system as it is now. Currently, merchants are subject to high fees of between 3 and 6 percent. This is usually distributed across several players, and often it goes unnoticed by consumers. For a business which is conducting thousands of sales a day, 3 to 6 percent adds up to a considerable cost of doing business.

This has been a dirty secret of online payment processing for a while and many companies aren’t willing to publish the cost of their services. Moreover, platforms don’t do anything to help small business owners. In fact, they often charge higher fees to new merchants with lower transaction volumes.

The Problem with Chargebacks

Chargebacks have become a rising difficulty for growing online businesses both big and small. A chargeback is a return of funds to the customer’s bank account or line of credit. They can happen for many different reasons, but all chargebacks are a blow to a merchant’s bottom line. Furthermore, a significant number of these interactions have proven to be fraudulent. This means that scammers are getting away with products and harming both merchants and customers. In 30 percent of cases chargeback purchases have been made with a stolen card.


In addition to being costly, chargebacks can damage the most important asset a business has: their reputation. More to the point, an excessive number of chargebacks can lead to closed merchant accounts which effectively kills the business. The power to destroy the reputation or the bottom line of a merchant should not be in the hands of fraudsters.

Traditional Payments Mean Slow Business

The final example of difficulties with traditional E-commerce platforms that we’d like to mention is one of the most important. Business can now move at the click of a button, but money does not operate at the same speed. Traditional payment methods are slow. They also work only during banking hours which means that payments can take several days to clear. This is compounded even more by international sales. So, while E-commerce is global and instant, payments are not.

The Rise of Crypto as Payment Currency

So, what is the solution? How do payment platforms rise to the demand of international E-commerce?

Fortunately, the answer has come in the form of cryptocurrencies. You may have heard of cryptocurrency assets like Bitcoin before, but because they are an emerging technology there is some mystery surrounding them. Virtual assets are powerful financial tools which can transfer wealth immediately and immutably. They are decentralised so customers and merchants can transfer wealth between one another without having to go through banks.

In its simplest form, a cryptocurrency is a digital asset that is kept on a shared ledger called a blockchain. The blockchain cannot be altered which means that funds and goods can be transferred trustfully. This reduces the possibility of fraud, increases transparency, and settles near instantly. Cryptocurrency payments have the potential to create a more globalised and borderless economy, as well as fighting financial inequality by bringing financial services to people without access to a bank. We see all of these a big win for everyone in E-commerce. Many of the world’s biggest businesses agree.

Major Retailers Dive into Crypto

It’s not surprising to see that both consumers and merchants are turning to cryptocurrency payments, as a faster, cheaper and more efficient payment solution. We have already seen major online merchants begin onboarding crypto payments.

Overstock.com, Expedia, Etsy and Microsoft all accept digital currencies for their goods and services.

Facebook, Samsung, IBM and JP Morgan are only a few of the big names of the most innovative companies stepping into blockchain.

The Next Evolution in Payments

While it might not seem so, online payments have gone through a massive evolution over the last many years. Innovation has always come from the advancing needs of retailers and customers. PayPal emerged as a necessity once eBay became popular. Remember, people used to mail physical checks when eBay was in its infancy. This is the ground floor for cryptocurrencies as a global payment system. But along with being on the cutting edge comes the responsibility of getting over key hurdles which are preventing mass adoption.


Conclusion

Online payments may have started by mailing a physical check from buyer to seller, but merchants and customers have evolved at a rapid rate.

Payment systems need to keep up with merchants and customers’ needs in every way possible.

This is why I’ve decided to embark on this mission with my UTRUST family.

Our mission is to bridge the gap between businesses and the growing crypto community. By bringing merchants and customers together into one powerful crypto payments ecosystem governed by trust, we can help the world make the leap into mass adoption and bring virtual assets to E-commerce.

Stay tuned … a lot of exciting news about our mission and project are coming soon!

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