Strategic research agency Fifth Dimension Consulting is urging companies to make smart use of crypto as a means of payment to meet the fundamental needs of a growing base of consumers investing in and using digital assets.
By Lyndall Spooner, Founder and CEO of Fifth Dimension Consulting.
Lyndall Spooner, Founder and CEO of Fifth Dimension Consulting.
According to Lyndall Spooner, founder and CEO of Fifth Dimension Consulting, her agency's research shows that customer experience is no longer about traditional elements like touchpoints and product delivery times
"It's also about an organization's ability and speed to adopt new technologies that facilitate an improved buying journey, and crypto falls into that category," she says.
“Companies can no longer bury their heads in the sand and pretend crypto doesn’t exist. It does, and the largest consumer group in the world is investing in it and using it in very useful ways.”
Multiple research studies have shown that millions of Australians have an active interest in buying cryptocurrencies, and interest is highest among Millennials and Gen Z, at around one in three people. Initially, cryptocurrencies were viewed as a powerful alternative investment option, particularly among those who cannot afford to own property, but now crypto is viewed as the currency of choice.
Well-respected Ms. Spooner has over 25 years of consulting and research services experience and is recognized as an expert in strategy, research and customer experience (CX). Fifth Dimension is a highly respected and globally-focused, industry-leading strategic research and advisory agency that has built an outstanding portfolio of well-known clients including Westpac, Coles, HCF, Telstra, Foxtel, Colgate and the Commonwealth Bank.
"Many businesses across Australia are already accepting crypto as a form of payment," says Ms. Spooner.
"The blockchain sector has evolved significantly in recent years and there are a number of trading platforms that offer businesses the ability to accept cryptocurrency payments."
According to Leigh Travers, CEO of Binance Australia, crypto will play an increasingly larger role in payments in the future as Australia aims to go completely cashless by 2031 as Covid-19 accelerates the death of physical currency.
“Australian crypto users and merchants will soon be able to accept and pay with crypto more easily thanks to Binance Pay,” he says.
“Binance Pay is a contactless, borderless and secure user-to-user cryptocurrency payment facility on the Binance app with 40+ cryptocurrencies supported.
“(It) allows users to pay, send and receive crypto payments around the world without incurring any fees. Binance Pay also enables merchant-based transactions, allowing users and merchants to choose their preferred payment options.”
According to Ms. Spooner, cryptocurrency payments offer benefits to both consumers and businesses.
"A lot of people who buy cryptocurrency do so because of crypto's democratized nature, ease of trading, low barriers to entry, and powerful and quick financial rewards," she says.
“In addition to investing in crypto, they want to be able to buy things with their crypto as well. Utility is important. Essentially, Gen Z and Millennials want crypto to become a part of mainstream life, and retailers are perfectly positioned to play a key role in making that happen.”
Crypto volatility is of course a major concern for businesses. It exposes companies to financial risk if the currency depreciates significantly and conversely to financial upside if the currency appreciates. Payment services can now act as an intermediary between the payer and the recipient to convert cryptocurrencies into a currency of your choice (fiat currency) – eliminating the risk of volatility.
The long-term question for businesses is therefore not whether they should accept cryptocurrencies and their volatility, but which currencies they should accept.
As of February 2021, there were over 7800 cryptocurrencies and over 2000 cryptocurrencies that had failed. Many of these currencies, like Bitcoin, require a lot of energy to mine coins, making them significant carbon polluters and the reason some companies like Tesla and some governments have stopped accepting them.
As companies look to become more sustainable and reduce their carbon footprint, this will put pressure on current leading cryptocurrencies like Bitcoin. Businesses will have the power to steer consumers toward "greener" cryptocurrencies that don't require as much energy to mine. With the release of digital services like Binance Pay and others, the acceptance of smaller cryptocurrencies will increase. Many of these smaller cryptocurrencies are also significantly cheaper to process than Bitcoin – so increased competition will bring the rise of new leading cryptocurrencies that will benefit both businesses and consumers.
Ms. Spooner outlines the benefits for businesses and customers in adopting crypto as a means of payment.
Shopping convenience for the customer
“Adding crypto as a form of payment gives buyers an additional form of payment. The more payment methods, the better the customer experience for buyers.
“In the online environment, brand owners need to understand that advanced payment options make the journey to purchase easier. In many cases, it makes the purchasing decision easier and more enticing.”
Funds are available immediately
“For retailers, the funds are available almost immediately. Cryptocurrency trading platforms provide tools for businesses that allow them to receive crypto payments in fiat form very quickly.
"It's a lot better than waiting days for traditional credit card schemes to deposit funds into retailers' bank accounts."
Lower transaction costs
“The cost of processing some cryptocurrencies is cheaper for businesses, which means fewer costs are passed on to buyers. Credit card payment providers typically charge an average transaction fee of one to two percent. Some crypto transactions may cost less.”
“One of the biggest advantages of cryptocurrencies is the time and cost savings in cross-border payments. Payments can be made 24/7, 365 days a year, are instant, and relatively cheap to process (depending on the token). Conventional FX systems can't keep up with that.”
Eliminate chargeback scams
“The risk of chargeback fraud is eliminated for companies. Crypto payments are immutable, i.e. H. once payment has been made, it cannot be reversed.
"Crypto payments are considered more secure and are less likely to be the target of fraud and DDos attacks."
About the fifth dimension consulting
Fifth Dimension has been recognized for its pioneering work, receiving a 2021 Confirmit ACE (Achievement in Customer Excellence) Award in the Innovation category, a 2020 Confirmit AIR Insight and Research Award Winner, and inclusion in the highly regarded 2020 GreenBook Research Industry Trends (GRIT) Top 25 Strategic Consulting Firms. Since its inception in 2006, Fifth Dimension's four pillars of expertise have continuously developed new capabilities to manage uncertainty and drive the development of market-leading approaches: strategy, experience, research and technology.