Partnerships Take the Guesswork out of Merchants’ Crypto Acceptance

With FTX dominating digital currency headlines and bitcoin and stablecoin prices gyrating, Daniel Escobar, chief technology officer of crypto tax service provider ZenLedger, said it’s important to look beyond the present turmoil in the digital asset space and accept what he called cryptocurrencies’ long-term destiny within mainstream commerce.

This, as joint research by PYMNTS and BitPay shows that 35% of tech-savvy consumers prefer to shop at merchants that accept cryptos. Those highly connected consumers who own and use multiple devices were shown to not only be most willing to experiment with emerging payment methods, but also more likely than other consumers to invest in or make purchases with cryptocurrency.

The conversation came as the final installment of “The Merchants Guide to Accepting Crypto: The Questions to Ask,” a PYMNTS series aimed at helping merchants large and small, online and in-store, examine what they need to do in order to offer crypto at checkout.

On the merchant side of the equation, Escobar said, “crypto acceptance is really at its very beginnings.”

Early use cases have involved consumers using crypto to pay for large-ticket transactions, such as luxury goods and even real estate.

But for cryptos to gain more widespread use in everyday commerce, merchant acceptance must grow too, he said. There are several considerations and operational challenges that must be addressed in order to boost that acceptance.

“The CFO is going to be the first one to say, ‘Can I, should I, how would I [accept crypto?]’” Escobar said.

And in addition to those high-level questions, there’s also the technical undertaking of integrating crypto acceptance.

Finding the Right Partners

“The best way to go about all this is to find the right partners,” he said, noting that enlisting the aid of outside providers can alleviate compliance concerns, which in turn allows merchants to focus on providing the best overall commerce experience, well beyond the confines of simply integrating payments acceptance within the checkout page of the website, platform or app.

“The right partner is going to be the one that focuses on compliance first,” said Escobar, “and they’ve taken a step sideways and backwards to examine, ‘How do we do this legally? How do we do this in a way where we are going to give confidence to every single [merchant] CFO that their money is not going to be stolen and their funds are going to actually arrive the next business day?’”

Merchants should ask some of the most basic — but essential — questions as they search for the right partners.

Among those questions: How long has the processor been operating? Is crypto integration a core functionality? What range of cryptos can be integrated?

And upon getting that processing relationship into place, application programming interfaces (APIs) are among the easiest paths to crypto integration, he said. APIs ensure that merchants’ back-end processes are modernized and capable of accepting different crypto coins over time as consumers’ preferences change.

“These firms need to feel secure that they’re going to have access to the millions and millions of users that can be accessible through the platforms,” Escobar said.

Looking beyond luxury and large-ticket purchases, he said there are a few friction points that need to be addressed to help crypto make inroads into everyday spending. There’s no way, yet, to use them beyond a push payment setting. (Subscriptions and recurring payments could be a natural fit for crypto.)

Volatility also needs to be addressed, he said, as does ease of acquiring the cryptos in the first place.

“When there’s an easier money flow between personal accounts to apps and wallets that can be used more easily to pay for goods and services,” Escobar said, consumers’ familiarity and use of crypto will increase. “I will be able to go to the grocery store or gas station and be able to pay for such services with growing ease.”

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