By Nyce Ayuk
In 2017, eCommerce accounted for $2.3 billion globally. This trend is on the rise and by 2021, it is expected to hit $4.9 trillion.
Even as this exponential growth gathers steam, there is an increasing look at how cryptocurrency, the virtual money that people can use to buy and send to other people can be integrated to the ecommerce industry.
Cryptocurrency is witnessing a revolution not only in Africa but in other parts of the world.
In Africa, the resurgence is not only powered by a growing adaptable
young professionals and budding entrepreneurs, but also driven by unreliable local
currencies and hyper-inflation.
As a result of these critical factors, an increasing number of people in Africa are beginning to view cryptocurrency as a viable alternative. The inherent advantages of cryptocurrency makes it attractive.
Recent global events especially the rampaging coronavirus pandemic has quickened the decline of Brick and Mortar businesses all over the world. As the Coronavirus protocols and guidelines kick in, people are forced to change their shopping habits.
The need to stay safe made social distancing inevitable in most parts of the world. As a result of this, more and more people now order everything online thereby enhancing the growth of ecommerce. Given this reality, various ecommerce platforms are increasingly under pressure to deploy innovative marketing strategies to provide satisfactory service to its huge online clientele. The advantages of ecommerce include the ability to shop from home and a flexible buying hour. But challenges that have dogged the operations of ecommerce remain. These includes the potential for fraud.
There have been several instances/situations where payments are made, and products are not delivered. In some cases, the product is delivered but its quality is
questionable. There is of course the issue of several logistical challenges. In order to
sustain and grow the patronage of consumers, many ecommerce behemoths and
retailers are deploying strategies to reduce the risks online shoppers are exposed to.
Gradually, the traditionally established method of payment such as credit cards is
getting competition from new technologies offering new payment systems. This is
where cryptocurrency comes in.
A BULWARK AGAINST FRAUD
By its very nature, cryptocurrency is transparent and is a bulwark against fraud. There is an astronomical increase in identity theft of consumer payment information.
According to Javelin Strategy and Research, in 2017 alone, 16.7 million people were
victims of identity fraud with a staggering loss of $16.8 billion. Banks also lose billions
of dollars yearly to fraudulent transactions. But the decentralized Blockchain security of cryptocurrency will put a stop to these fraudulent activities. Cryptocurrency conducts transactions using Blockchains with digital ledgers and therefore makes collecting data more reliable and secure from manipulation. Blockchain transactions are fraud proof because there will be no release of funds until both the retailer and shopper confirm the agreement. In this system, trust is replaced with transparency.
Blockchain tells you whether the party you are dealing with is telling the truth. It can definitely be used to keep the identity of the consumer safe.
IT IS COST EFFECTIVE
Cryptocurrency is very cost effective since it cuts off middlemen and facilitates the
movement of money at comparatively low transaction cost. Retail trading uses the
established traditional methods of payment which attracts high cost of transaction
fees. Every aspect of the transaction is froth with third parties who must be paid for
their services. Cryptocurrency drastically reduces the need for the services of these
middlemen and is therefore cost effective. In Cryptocurrency payment system, the
retailer is not responsible for either excessive processing fees or liability from
fraudulent transactions. But through the immutable payments of the Blockchain, the transactions are transparently recorded. When a shopper sends a payment to the retailer, a public record is created and cannot be changed or manipulated.
Platforms such as Android and iOS use and support transactions. Blockchain
technology and ecommerce have changed how we understand and use different
ecommerce platforms available today. The integration of cryptocurrency as a method of payment in ecommerce looks inevitable but there is still a long way to go. Those who are making a big push for the adoption of cryptocurrency are convinced by its obvious advantages. It provides anonymity and relies on no intermediary as the transaction is done strictly between the retailer and the shopper. In all these, there is however a downside to Cryptocurrency. It is volatile and the value can fluctuate. The reality is that given the erratic nature of cryptocurrency, those who patronize it must be ready to incur losses at any time. The fear factor may have played a role against its full integration. The fear of change in any given environment is real. Also, the operation of Blockchain technology and cryptocurrency appear to be too complicated for some
people and therefore confusing. But the advantages far outweigh the disadvantages.
The tracking of inventory can be substantially enhanced using Blockchain. It has the
capacity of gathering accurate information thereby reducing product wastage along the supply chain.
No matter how formidable the challenges may seem, we should not lose sight of the real purpose of cryptocurrency and Blockchain technology which is to provide secure and transparent transactions. And with more partnerships between traditional businesses and Blockchain start-ups, the prospects for greater role for cryptocurrency in the coming years is bright.