With cryptocurrency values highly volatile at present, its immediate future as a consumer payments form is experiencing a moment of doubt. However, dialed-in businesses and digital-native consumers continue to show faith in crypto by buying it, holding it and paying with it.
Consumer interest in crypto bloomed during the pandemic, with PYMNTS finding that “the percentage of consumers who held crypto at some point during the year rose to 23% in 2021 from 16% in 2020.” After the crypto bloodbath of recent weeks, confidence is wavering.
“Paying With Cryptocurrency: What Consumers and Merchants Expect From Digital Currencies,” a PYMNTS and BitPay collaboration, drew from over 2,330 consumers and investors, along with more than 200 merchants with annual online sales of at least $250 million, to understand crypto sentiment during a down cycle and how it may impact the near future.
Get the study: What Consumers and Merchants Expect From Digital Currencies
PYMNTS found consumers and merchants still enthused about holding and making purchases with crypto despite the downturn, as the following highlights from this in-depth study show.
Consumers’ reasons for buying and holding crypto differ, with PYMNTS research finding that more than half (55%) of consumers who have held cryptocurrency in the past year bought it as an investment. These are typically higher earners, as only 15% of consumers making under $50,000 have held crypto.
“The share of consumers holding cryptocurrency for use as a payment method has grown,” the study stated. “Sixteen percent of consumers currently own some cryptocurrency, compared to 12% a year ago. Bitcoin remains the most popular digital currency and was held by 12% of consumers surveyed. Ether is the next most popular digital currency, and it was held by 6.8% of consumers surveyed.”
Eighty-fiver percent of companies generating online revenues over $1 billion said they are innovating point-of-sale (POS) systems to accept crypto payments, so the wider trend among online businesses is also embracing crypto acceptance as a payment method.
Gaining new customers is the driving factor for merchants adding crypto acceptance at the POS, and 32% of companies surveyed “call it the most important factor in their decision to accept or begin accepting crypto payments,” according to the study.
Given current volatility, and as a profit margin consideration, merchants are drawn to crypto payments for savings in payment processing fees offered by this asset as a payment form.
With eight in 10 merchants saying crypto can save on interchange and fees associated with other payment methods — and 26% calling it the most important reason to move into crypto acceptance — the study stated that “[t]hese attributes of crypto provide some evidence about crypto’s appeal for many merchants,” adding the caveat that “most merchants recognize that adopting crypto as a payment method and expanding its usage will call upon them to overcome some significant obstacles.”
Get the study: What Consumers and Merchants Expect From Digital Currencies
