Adoption Grows as 75% of Retailers Are Eyeing Crypto Payments

By:

Updated: Aug 9, 2022, 18:53 UTC

More crypto options will be layered into how people pay as merchant adoption is set to skyrocket in two years.

Key Insights

Deloitte has found that 75% of U.S. retailers plan to accept crypto payments within the next two years.
More than half of large retailers are building the required infrastructure to integrate digital currencies into their services.
64% of merchants said that their customers have expressed interest in using crypto for payments.

Despite the crypto market collapsing in May, wiping out nearly $40 billion in investors’ capital, a new survey published by Deloitte suggests that merchants are optimistic about cryptocurrency’s future.

Deloitte, a leading global provider of audit and assurance, consulting, financial advisory, risk advisory and tax services, has found that 75% of U.S. retailers plan to accept crypto or stablecoin payments within the next two years.

As it currently stands, there are over 320 million crypto users worldwide, with global crypto adoption rising by over 880% last year, according to data from Chainalysis and TripleA. As more and more people continue to invest in cryptocurrencies, it is expected that digital assets will make an even larger impact on the retail sector in the coming years.

Merchant Adoption of Digital Currencies

According to Deloitte, more than half of large retailers with revenues over $500 million are currently spending $1 million or more building the required infrastructure to integrate digital currencies into their services.

A large chunk of surveyed merchants (85%) said they anticipate that cryptocurrency payments will become more prevalent in their respective industries within five years, while 60% expect budgets of more than $500,000 to enable crypto payments this year.

In addition, small to medium-sized companies are also entering the space, with 73% of retailers with revenues between $10 million and $100 million investing between $100,000 to $1 million to create the necessary infrastructure.

The survey also found that consumer interest is fuelling merchant adoption, with 64% of retailers confirming that their customers have expressed interest in using crypto for payments. Around 83% of merchants anticipate that this interest is only set to increase in the future.

To this end, a recent study by research firm Insider Intelligence revealed that the number of adults in the U.S. relying on digital assets for everyday purchases is set to surge 70% by the end of this year. This means that 3.6 million Americans, or 10.7% of all crypto owners, will be paying for goods and services in crypto by December 2022.

Insider Intelligence expects cryptocurrencies to exceed $10 billion in global transaction value this year. In fact, the company believes that as digital asset adoption accelerates, the number of users worldwide may eclipse 37.2 million by 2023. This figure is feasible considering that investors entering the global crypto fray have nearly doubled across countries like India and Brazil within the last 12 months.

Push for Crypto Payments

While nearly half expect that cryptocurrency adoption will enhance the customer experience, 93% of retailers that are already accepting cryptocurrency have reported a positive impact on their customer metrics.

However, challenges remain and many merchants cited concerns related to the security of payment systems (43%) fluctuating regulations (37%), volatility (36%) and a lack of budget (30%).

Indeed, the complexities linked to the integration of cryptocurrencies with legacy systems poses the largest challenge, according to 45% of surveyed retailers. Deloitte expressed that wider adoption is more likely across a broader set of products and services as partnerships with regulated and established institutions in the industry help to deliver the benefits of digital currencies.

Additionally, more than 80% of surveyed merchants would be motivated to adopt digital currency payments if third-party processors avoided the traditional holding period or offered no conversion fees for digital and/or fiat currencies.

As it currently stands, 7879 global merchants accept Bitcoin (BTC) as a payment method, according to data from Cryptwerk. That figure stands at 4081 for Ethereum (ETH), 3284 for Litecoin (LTC), 2935 for Bitcoin Cash (BCH), 2058 for Dogecoin (DOGE), 1770 for Dash (DASH), 1658 for Ripple (XRP) and 1299 for Monero (XMR).

Also, leading fashion brands Balenciaga and Gucci announced recently that they are accepting cryptocurrencies across flagship U.S. stores, while PayPal expanded its offering to enable users to transfer cryptocurrency to external wallets after launching a new service last year that enables customers to buy, hold and sell cryptocurrency directly from their PayPal account.

Overall, Deloitte polled 2,000 senior executives at U.S. retail organisations between December 3 and December 16, 2021. The participants were distributed equally among the cosmetics, digital goods, electronics, fashion, food and beverages, home and garden, hospitality and leisure, personal and household goods, services and transportation sectors.

Growth

In other news, a new report by Messari and Dove Metrics has found that $30 billion was raised from 1199 funding rounds in the first half of this year, outpacing the entire year of fundraising in 2021. The centralised finance (CeFi) sector received a third of the total funds raised, while decentralised finance (DeFi) saw $1.8 billion in funding.

Meanwhile, Venture Capital (VC) investments in the space have reached $18.3 billion so far this year, which is nearly triple the amount invested in 2020 and also on pace to surpass 2021’s record of $32.4 billion, according to Steven Alexopoulos, an analyst at JP Morgan. With such developments in mind, it is clear that the cryptocurrency industry is set to expand further, with increased adoption setting the stage for future growth.

Five Things to Know in Crypto This Week: The Halving, the Fed, and the Middle East

About the Author

Mohadesa Najumiauthor

Mohadesa Najumi is a British writer who has worked within crypto, forex, financial technology, and the stock market industry. Mohadesa received her MSc in Political Science and International Relations at the University of Amsterdam.