The acceptance of cryptocurrency payments by businesses has been a topic of debate among enthusiasts. While some argue that this promotes adoption, others contend that if the crypto received is immediately sold, it may not significantly contribute to adoption. The fundamental essence of adoption lies in consumer willingness to transition to cryptocurrencies for their transactional needs. Nevertheless, a study by Forrester Consulting revealed that merchants accepting Bitcoin attracted new customers and increased sales. Payment processors like BitPay and CoinGate accelerate adoption by enabling businesses to accept cryptocurrency payments and staying compliant with local regulations. However, their usage dilutes the foundational ethos of cryptocurrencies centered on decentralization and self-sovereignty.
## Pay and Dump: How Business Accepting Crypto Payments Influences Adoption
Cryptocurrency enthusiasts often argue that businesses need to start accepting crypto as payments for adoption to grow — boosting usability and potentially creating strong demand for these currencies. Some crypto communities often focus heavily on growing business adoption, with maps now compiling businesses worldwide that accept different cryptocurrencies as a payment method. But if a business accepts cryptocurrency payments only to dump them on the market, it may undermine the entire effort, as the assets are just being sold back on the market right after payment.
Moreover, a business accepting cryptocurrency payments through a third-party processor isn’t adhering to the cryptocurrency ethos of managing their own private keys, meaning controlling their wallet fully.
### Do businesses accepting crypto boost adoption?
On its surface, a business accepting cryptocurrency payments would boost adoption. Still, if the digital currency received is immediately sold back on the market, it’s generating as much demand as it is supply. This simultaneous buy-sell cycle may not significantly contribute to cryptocurrency adoption. Additionally, it isn’t clear how relevant a business accepting cryptocurrency payments can be for actual adoption, as users are unlikely to go through the process of buying cryptocurrencies if they can just pay in their local fiat currency.
The essence of adoption doesn’t merely reside in the act of acceptance by businesses; it fundamentally lies in the ease of access and willingness of consumers to transition to cryptocurrencies for their transactional needs.
A study by leading research and advisory firm Forrester Consulting revealed that merchants accepting Bitcoin (BTC) attracted new customers and sales.
### What are the potential impacts?
According to William Zielke, BitPay’s chief marketing officer, cryptocurrency payment processors give cryptocurrency spenders a fast, easy way to pay for large ticket items and everyday purchases. Cryptocurrency payments bring in up to 40% of new customers for merchants, with crypto customers spending twice as much as those using credit cards. While Sankar Krishnan, head of digital assets and fintech at consulting firm Capgemini, highlighted that when cryptocurrencies “become a more viable option for day-to-day purchases, we can expect more payment providers to embrace and facilitate cryptocurrency transactions.”
### Crypto payment processors as on-ramps
Third-party payment processors, like BitPay and CoinGate, help businesses stay compliant with all local regulations to facilitate accepting cryptocurrency payments while promoting new businesses to the cryptocurrency community as they start accepting crypto payments. Major automobile manufacturer Honda, for example, does not accept crypto payments, but through FCF Pay, people can use Bitcoin and other cryptocurrencies to buy a Honda car.
### Why pay with crypto?
Justas Paulius, CEO of cryptocurrency payments processor CoinGate, indicated that consumers “tend to re-purchase cryptocurrency they’ve spent soon after,” suggesting that when businesses accept cryptocurrency, there’s indeed higher demand.
Payments may be challenging for most businesses, but what to do with the received amounts may prove just as difficult. Most companies accepting crypto payments convert the funds immediately, but what if they didn’t?
1. **What did a study by Forrester Consulting reveal about merchants accepting Bitcoin?**
The study found that cryptocurrency payments bring in up to 40% of new customers for merchants, with crypto customers spending twice as much as those using credit cards.
2. **How do third-party payment processors facilitate accepting cryptocurrency payments?**
They help businesses stay compliant with all local regulations and promote new businesses to the cryptocurrency community as they start accepting crypto payments.
3. **What are the potential impacts of businesses accepting crypto payments?**
Cryptocurrency payment processors give cryptocurrency spenders a fast, easy way to pay for large ticket items and everyday purchases and bring in more customers who spend more.
4. **Why would consumers choose to pay with cryptocurrencies over their local fiat currency?**
Banking might not be an option in some cases and cryptocurrencies could be a much-needed solution. Refugees or people in countries with a non-functioning financial system could rely on a decentralized network. Additionally, some people value their privacy and use cryptocurrencies to disclose less or none of their personal information to fewer third parties.