The rise of online retail has changed the way consumers shop. It’s much easier to find what you’re looking for, compare prices, and buy products online than in a brick-and-mortar store. It makes sense that this shift to e-commerce would bring new challenges with it.
When selling goods online, companies need not only to use SEO for crypto e-commerce – cryptoseo.io but also to contend with the cost and risk of digital transactions as well as fraud prevention. For example, traditional payment processors such as Visa, Mastercard, American Express, or Discover charge companies a fee for each purchase that is made using their services plus a fixed fee per transaction. These costs can quickly add up if a company sells a lot of items on its website or accepts credit card payments from customers frequently.
By comparison, blockchain technology makes it possible for retailers to receive payment again without all the middlemen taking their cut and without requiring the verification of additional personal information from customers who make future purchases from them. This article will highlight how blockchain and cryptocurrency can be leveraged to take e-commerce to the next level.
What is blockchain, and how does it work?
As the name suggests, blockchain technology is about a chain of blocks that are linked to each other. The blockchain is really what powers cryptocurrency. Cryptocurrency is the digital equivalent of cash or any other form of value that is sent through the internet. A cryptocurrency isn’t managed by any central authority, so it’s decentralized and therefore more secure than other digital payment methods.
With blockchain, it’s possible to keep track of every single transaction that takes place. In the case of e-commerce, companies can see who made the purchase, when it occurred, and what products were exchanged. This data can be used to prevent fraud and ensure accurate accounting. It can also help detect patterns in spending that could point to a potential security breach.
Benefits of blockchain in e-commerce
There are plenty of benefits of using blockchain technology in an e-commerce business, but the main ones are:
- Transparency and security: The blockchain acts as a transparent ledger. It keeps track of all transactions between parties. This makes it possible to detect unusual spending patterns. It also acts as an independent security measure. When transferring cryptocurrency between parties, each transaction is verified by the blockchain and this process is anonymous.
- Efficiency: When buying goods and services in an online store, there’s often a long wait time between when a person places an order and when it’s finally delivered. With blockchain, however, the time it takes to complete the payment process is reduced.
- By using blockchain technology, a company can see how often products are being bought and track when orders are being delayed. This information can be used to detect problems in the supply chain and improve service delivery.
- Lower cost of settlement and transaction: The high fees charged by credit card companies for every transaction are a major deterrent for consumers to use this form of payment. By eliminating the middlemen, merchants and customers can both save money.
- Automated settlement of contracts, increasing trust between customers, suppliers, and partners. Trust is another challenge in online commerce. Customers have high expectations when buying goods online. At the same time, merchants need to deliver on their promises without losing their reputation. Blockchain technology can help to increase trust between customers and merchants. It can also help to automate the processes of contracts and other agreements between parties.
Cryptocurrency for e-commerce
Two main reasons why your e-commerce business should start accepting cryptocurrency as a form of payment:
- First, it can help speed up sales. When a customer uses a credit card to make a purchase, it can take days for the transaction to be processed. If a customer uses a cryptocurrency payment, the transaction can be completed within a few hours.
- The second reason is security: credit card data are easy to steal. Cryptocurrency transactions, on the other hand, are extremely hard to steal because they’re fully anonymous.
Most customers will use a payment provider to convert cryptocurrencies into cash. You can find several payment providers that specialize in this field.
Use cases for blockchain and cryptocurrency in e-commerce
These technologies can be applied as follows:
- Supply chain management: When companies sell products online, they need to ensure that the products reach their customers. The problem is that there’s no guarantee that the products will reach them in good condition. With blockchain, you can keep track of the whole supply chain. The system can let you know when a product is about to be shipped, who’s responsible for managing the supply chain, and how reliable that person is.
- Product traceability: With blockchain, you can easily track a product’s source. This can help you detect when third parties are trying to substitute ingredients or make counterfeits. You can also use blockchain to make sure that products are genuine.
- Automated invoicing: If an online retailer wants to automate the process of entering the sales and purchase data of customers into accounting software, then they can use blockchain technology. This makes it possible for the software to track sales and purchase data automatically without the intervention of accountants or administrators.
- Secure customer data storage: Consumers expect a high level of security when it comes to sharing their personal data like their financial information. If an online retailer wants to store customer data like name, address, and email securely, then they can use blockchain.
How to get started with blockchain and cryptocurrency in e-commerce?
To begin with, you need to decide which blockchain to use. It’s crucial to choose the blockchain that suits your business best. There are many blockchain networks to choose from such as Bitcoin, Ethereum, Ripple, and others. Once you’ve identified the right blockchain network for your company, you’ll need to decide how to implement blockchain technology.
Many companies choose to focus on developing an application that will be used to manage cryptocurrency payments. However, if you have a product that can be traced using the blockchain, you can easily track the path of the product from production to delivery.
The future potential of blockchain and cryptocurrency in e-commerce
Considering that approximately $250 billion are lost in digital commerce fraud each year, it’s clear that there’s still a lot of untapped potential in this field. The blockchain and cryptocurrency market is still in its infancy, and we can expect a lot more innovation and growth in the future. With the development of blockchain technology, it’s possible to create new business models that are more efficient and transparent. It’s possible to leverage the blockchain to solve the problems of the supply chain and improve the speed of transactions.