Crypto Payments Will Soon Divide Merchants Into ‘Haves’ and ‘Have Nots’

Once thought of as just a fad, cryptocurrencies are gaining, well, currency as a conduit for mainstream commerce.

BitPay CEO Stephen Pair, PacSun CEO Michael Relich and Verifone Head of Advanced Payment Methods Jeremy Belostock told PYMNTS’ Karen Webster that merchants need to heed the clarion call: Tens of millions of consumers across the globe have cryptos in hand and want to spend them.

Merchants need to meet that desire to spend at the point of sale. If done well — that is, embedded as an offering at key decision points — offering crypto payments can be a game-changer for consumers and merchants alike, cementing customer loyalty and boosting basket sizes.

According to Belostock, consumers are increasingly prodding merchants to add the option to use cryptocurrencies at the point of sale.

Not surprisingly, the panelists themselves told Webster they’ve had some firsthand experience with cryptos. Pair noted that he has made a purchase at the point of sale with the payment option, Belostock said he has held cryptos, Relich said he owned crypto, but at the time of the conversation, hadn’t yet bought anything with it.

At a high level, Pair said, merchants should be aware of the trends taking shape. As he told Webster, “The compelling reason for a business to accept crypto at the point of sale is simply that [we] now see this growing population of people that have crypto.”

Platforms on offer from firms such as BitPay, he said, make it relatively easy for a merchant to accept payment and build that payment into a workflow — and even raise awareness among crypto holders that they can transact with that merchant.

Good to Go on Crypto

The interest in using the digital offerings to transact is clearly there, as the numbers show. PYMNTS research has found that as many as 46 million consumers — about 18% of the U.S. adult population — would make a purchase using crypto. If crypto were available as a payment method, of course.

Merchants need to be able to integrate cryptocurrencies into their payment operations. When they do, they can cement loyalty — and even boost the size of the consumers’ basket or spend.

PYMNTS also found that 12% of the population — or about 30 million individuals — own at least one crypto. That primes the pump, so to speak — they’ve got the cryptos in hand and thus could conceivably spend them. More than 60% of current and past holders purchased crypto so they could transact using it, but two-thirds of those holders have said that not enough merchants accept crypto payments.

The conversation came after PacSun recently became the first youth fashion retailer to accept crypto — which would dovetail with the fact that younger consumers are the key demographic for crypto-as-payments: As many as 54% of crypto holders are members of Generation Z. The retailer is working with BitPay to support roughly 11 cryptocurrencies.

Read more: Gen Z Fashion Retailer PacSun Now Accepts Crypto 

Relich noted that crypto acceptance “had been on our roadmap for some time — and [with BitPay], we were live in less than three weeks.” Verifone’s Belostock explained that integrations can be simplified and streamlined for merchants wishing to connect to digital wallets and take cryptocurrencies at the POS.

Smoothing the Path

Favorable tailwinds right now may ease the passage to crypto spending, the panelists noted. The embrace and use of digital wallets have grown. And rising crypto prices, as volatile as they have been, have gotten people mulling how to leverage those gains into tangible benefits by buying goods and services.

Drilling down a bit, we find nuances in how consumers want to hold and spend their cryptos. Pair noted that when people hold crypto, they want the convenience of being able to spend it directly rather than trying to sell it, convert the crypto into fiat and then make a purchase.

To get a sense of scale, consider the fact that there are at least 100 million crypto wallets out there, by PYMNTS’ estimations. And as Pair noted, the firm’s eCommerce solution (BitPay is also working with Verifone), which supports 90 wallets, enables merchants that sign onto the platform to support each and every one of them.

For cryptos to become mainstream and more widely accepted at the point of sale, Pair explained, “You not only have to make the experience great for the buyer, but you also have to make it great for the sales associate who might have to process a potential refund.”

The Digital-First Firms 

For digital-first firms like PacSun, which has two million TikTok followers and weekly livestreamed shopping events, Relich said, catering to the needs and desires of Gen Z makes sense intuitively.

“Adopting crypto was something that was natural for us,” he said. But as Pair noted, the interest in embracing crypto payments has run the gamut, from traditional big-box retailers to quick-service restaurants. “Merchants want to show they can accept the way that consumers want to pay.”

Forward-Thinking Merchants 

Panelists noted that offering cryptos to consumers broadens the user base — and might bring through the proverbial door would-be customers who might not have looked at them before. They find, as Relich said, that the merchant “fits in with their ethos.”

There’s another benefit for forward-thinking merchants too, panelists observed: They can use crypto as a competitive advantage when it comes to hiring talent, paying their wages in crypto if those workers desire that option (BitPay offers a payroll product that allows employees to receive part of their wages in cryptocurrencies).

Per Relich: “People see that we’re ahead of the curve — and I think it makes PacSun a desirable place to work.”

Of course, it’s early innings yet in the crypto-as-commerce game. Relich noted that the awareness that crypto is spendable, and that merchants can and should embrace it, is not as widespread as it could be. For the merchants that do accept crypto, he noted, the impact is significant: “The average order value of transactions done with crypto is much higher” than with traditional currencies.

That may be because the average crypto user skews a bit more affluent than other customers; with the cryptos’ gains in hand, they have more purchasing power than other consumers. Pair concurred, noting that among BitPay’s merchants, individuals who use cryptos spend about twice as much as a typical credit card user.

Looking ahead, said the panelists, the crypto community will grow, probably exponentially. According to Pair, “Merchants in every category will start to add cryptos as a payment option for their customers — initially for them to experiment with.” And as Relich noted, “There will be a network effect — with ‘haves’ and ‘have nots’ among retailers. There’s no downside to accepting cryptos.”