In recent years, cryptocurrencies have emerged as a transformative force in the world of finance. These digital currencies – such as Bitcoin and Ether – are decentralised and offer secure, efficient, and borderless transactions.
As their popularity continues to surge, it is crucial for retailers to consider embracing crypto acceptance as a payment option. [Side Note: If you’re needing a refresher on Digital currencies the RBA has a handy explainer here.]
Although cryptocurrency is not legal tender in Australia, digital currencies such as Bitcoin are considered a legal asset and can be traded. There are a number of businesses across Australia already accepting cryptocurrency payments. Petrol station and convenience store chain OTR Group is one such company already allowing people to pay for their petrol and purchases using cryptocurrencies.
Understanding the risks and rewards for retailers of crypto acceptance is essential to widespread adoption across the retail industry. So, what are the risks and rewards?
- A growing customer base
Integrating crypto acceptance into retail operations can open doors to a vast and growing customer base. RBA’s June 2023 bulletin “Consumer Payment Behaviour in Australia” highlighted that there was over 60 per cent awareness of cryptocurrency as a method of payment by respondents. Different reports from HedgewithCrypto and Statistia estimate that between 18 and 25.6 per cent of the Australian population own some form of cryptocurrency. Cryptocurrency enthusiasts are eager to spend their digital assets and are actively seeking accepting businesses. By accommodating this growing customer segment, retailers can tap into a niche market and attract a new set of customers who value the convenience and security that cryptocurrencies offer.
- Diversification of payment options
Consumer preferences are evolving, and retailers must adapt to meet these changing demands. By offering cryptocurrency as a payment option, retailers diversify their payment methods, opening their business to a broader range of customers. With convenience and choice highly valued, accommodating diverse payment preferences can contribute to customer satisfaction and retention.
- What about the volatility of cryptocurrencies?
Mitigating the volatility of cryptocurrencies can be a barrier for retailers as a payment option. To navigate this, retailers can employ certain strategies to minimise impact, including:
- Instant conversion to fiat currency: Retailers can partner with payment processors or cryptocurrency payment service providers that offer instant conversion of received cryptocurrencies into fiat currency. The retailer then receives payment in their preferred local currency, reducing the exposure to cryptocurrency price fluctuations. This provides a level of stability and certainty for the retailer, allowing them to maintain consistent pricing and financial operations. Retailers can limit their exposure to the volatility by working with a payment service provider that will convert received cryptocurrencies into fiat currency, at the time of purchase. Through converting the received cryptocurrencies at the point of purchase, retailers can secure their earnings and reduce the potential impact of sudden price swings.
- Watch out for stablecoins: Stablecoins are cryptocurrencies designed to maintain a stable value by pegging their price to a specific asset, such as a fiat currency or a commodity. By accepting stablecoins, retailers can minimise the risk associated with price fluctuations as they provide a relatively stable value, which is advantageous for day-to-day transactions and maintaining predictable revenue streams. This type of cryptocurrency is currently being explored across the industry for suitability in Australia. Stablecoins may become a viable alternative payment method in the coming years.
- Price adjustments and real-time calculations: To adapt to cryptocurrency volatility, retailers can consider implementing dynamic pricing strategies, leveraging real-time calculations to adjust prices based on the current exchange rate of cryptocurrencies. By linking prices directly to exchange rates, retailers can ensure that customers are charged the correct amount at the time of purchase, reducing the risk of loss due to price fluctuations.
- Innovation and Early Adoption Advantage: By embracing crypto acceptance early on, retailers position themselves as innovative and forward-thinking establishments. These can be valuable reputational assets in an increasingly competitive marketplace. Adopting cryptocurrencies as a payment option demonstrates a commitment to staying at the forefront of technological advancements and meeting evolving customer demands. Such early adoption advantages can attract tech-savvy customers who value cutting-edge solutions and are more likely to choose businesses that align with their values.
What is ANZ Worldline Payment Solutions doing in this space?
ANZ Worldline’s parent company, Worldline SA recently partnered with a luxury hotel Chedi Andermatt to provide cryptocurrency acceptance to their business with great success. The solution provides the business the option to accept payments in cryptocurrencies, with many of the volatility issues mentioned above mitigated, one solution and one experience for both at the Point of Sale and in e-commerce. The underlying proposition Worldline Crypto Payments is fully operational across Europe with well over 1000 innovative businesses introducing the payment method into their in-store and e-commerce business operations. ANZ Worldline Payment Solutions is looking forward to introducing this innovative solution to Australian retailers in the coming year.
The acceptance of cryptocurrencies as a payment option is no longer a futuristic concept but a present-day reality. Retailers who proactively embrace this technology can benefit from expanding their customer base, providing their customers with more ways to pay how they want and, potentially building out a competitive advantage in the market. While there are still challenges to overcome, such as price volatility, the potential benefits may outweigh the risks.
About the author: ANZ Worldline Payment Solutions provides secure payment and transaction services to merchants right across Australia. From sole traders to Australia’s largest institutional companies, it has a market-leading solution to help you grow.
ANZ Worldline Payment Solutions is a partnership between ANZ Bank and Worldline – Europe’s #1 payment service provider and number four globally.
The partnership brings together the strengths of both companies – ANZ’s trusted local expertise and industry oversight, and Worldline’s best-in-class, end-to-end payment solutions and global innovation.
By joining forces, the companies are introducing Australian retailers to some of the most innovative e-commerce and in-store payment solutions available globally.
Things you should know
Since this guidance has been formulated without taking into account your specific goals, financial condition, or requirements, it is essential that you assess its suitability for your individual situation before taking any action based on the provided information. Prior to making any decisions based on this information, it is recommended that you seek independent financial advice. The information, opinions, conclusions, or recommendations presented in this article are reasonably formulated based on available information at the time of publication. However, no guarantee is given regarding the accuracy, reliability, or completeness of any statement made in this article.
ANZ Worldline Payment Solutions means Worldline Australia Pty Ltd ACN 645 073 034 (“Worldline”), a provider of merchant solutions. Worldline is not an authorised deposit taking institution (ADI) and entry into any agreement with Worldline is neither a deposit nor liability of Australia and New Zealand Banking Group Limited ACN 005 357 522 (“ANZ”) or any of its related bodies corporate (together “ANZ Group”). Neither ANZ nor any other member of the ANZ Group stands behind or guarantees Worldline.