Today, digital currencies have become popular and they are creating a strong impression on the market. Multiple industries have adopted this technology and the online transactions are integrated into the business models for most startups. In addition, it is reported that there are more than 1400 bitcoin ATMs that are being used across the globe.
In this article, you’ll learn about how the digital currencies are changing the business environment.
Cross-border transaction are becoming easy
Traditionally, making international money transfers takes a significant amount of time and it’s also expensive for businesses. However, digital currencies are changing the situation since you can make payments to any part of the world with a click of a button.
While this is a relatively new innovation, the benefits can be seen across various industries. But for this to be applied to all industries there needs to be additional development to make it simpler. The sooner this happens; it will be possible for anyone to transfer money across the continents at a fraction of the cost they pay today.
Over the years, there has been serious lobbying on the formation of a global currency. Digital currencies could be the right candidate to fulfill this goal. As such, there is no need to convert from one currency to another since it bears the same value across multiple countries. Since receiving money through this technology is as simple as sending an email to your friend, businesses are better positioned to handle cross-border transactions.
They offer stability as a reserve currency in any economy
Although digital currencies are still new to the economy, they have a demonstrated stability that surpasses the fiat currencies in use today. For instance, in Venezuela, the inflation levels have risen to about 128% in a few months. However, the bitcoin has remained stable and it has been widely used in the country.
When it’s used as reserve currency vulnerable startups will have a better chance to survive when the economy isn’t doing very well. This issue is prevalent in most third world countries because the governments tend to trigger the inflation in a bid to stay afloat. However, this has a negative effect on most businesses in the countries.
Since the digital currencies are not regulated by central banks, the quantity limits are highly controlled. In addition, the algorithms controlling the creation of these currencies are designed to curb any attempt of fraudulent creation of the currency.
Chargebacks have been dramatically reduced
Chargebacks have been a pain for most businesses in the past. Unethical individuals can buy a product from your business and afterward, they can falsify some information and ask the credit card provider for a refund. As a result, businesses lose lots of money and if you are running a new startup, this can be devastating.
However, it’s possible to curb this menace by using digital currencies. Basically, the transaction is fully completed the second you have money in your account and there is no middle man to remit the funds to you. While refunds are encouraged when the customer deserves it, you can choose to keep the money if there is anything that points towards fraud.
Opportunity to venture into new markets
If you’ve been in business, you probably know that the opportunity to break into new markets comes with difficulties. Since digital currencies are not yet mainstream innovations, businesses that can incorporate this payment method have the opportunity to benefit from the existing population that wants to transact exclusively with digital currencies.
While some people argue that investing in digital currencies is risky business, this is only due to the possible fluctuations in price as well as the continuous evolution of regulations. However, businesses are set to reap huge benefits from digital currencies considering the trends for the last few years.
If your business is willing and ready to address the growing digital currency enthusiasts, you stand a chance to outsmart your competitors.
Taking e-commerce to full scale
For most businesses, accepting overseas payments through credit cards can be tricky due to the prevalent cases of fraud. But when you use digital currencies, it’s impossible to reverse the transaction unless the two parties agree. As such, it makes it possible for businesses to accept payments from almost every country since the chances of fraud are low.
With the ease of sending and receiving funds, the level of online business is set to explode since you can buy from virtually anywhere. To small businesses, this is an opportunity to venture into markets that were previously left to huge corporations since the playground is somewhat level.
Emergence of disruptive lending platforms
The rise of digital currencies has given rise to lending platforms that offer no credit loans which are denominated by normal currencies but they are backed by cryptocurrencies. This enables cryptocurrency holders to leverage the value of their investments and access a loan without the need to liquidate these valuable assets.
Basically, the innovation has come to address the underserved customers by traditional banks who don’t recognize the value of cryptocurrencies. As such, it’s now easier to use your digital currencies as collateral for a quick loan.
Smart contracts and programmable money
When a currency is digital, you can move it automatically which is critical in the implementation of smart contracts with programmable money. To illustrate, a buyer deposits the funds for a transaction in an escrow account where it’s held until the transaction is completed and both parties are satisfied.
Today, more transactions are happening online and for most people, trust is a huge issue. As a result, some people will feel safer when they know that the money is secure in the account awaiting delivery of the ordered goods or services. There is also another option where the money must be authenticated by more than one parties to ensure minimal loss of digital funds when doing trans-border transactions.
While the digital currencies have been around for some time, it is yet to become a mainstream technology. However, most businesses are finding themselves in a difficult situation when deciding whether to embrace the technology or wait until all their customers are fully equipped to go digital.
Nevertheless, there are those that have realized that the digital revolution is real and have taken full advantage. If you want to get ahead of the pack and make sure your business is relevant in the changing landscape, adopting the technology is a wise move.
With regard to the current trends, the digital currencies will shatter international boundaries and make business easier. In addition, customers are becoming more tech savvy and they demand an easier way of doing online payments.