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Businesses Face Obstacles When Embracing Crypto

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As a business, accepting crypto is harder than it should be. The technology is different, but that’s nothing new.

According to George DavisCo-founder and Chief Product Officer of a crypto payment technology company BVNKMore, going back to the beginning of cryptocurrency with Bitcoin. Specifically, it started as a peer-to-peer payment product designed to bypass financial institutions and grew into an investment product before companies began taking it seriously as a payment currency.

“Crypto evolved retail investors first, so there is a huge early adopter community in crypto for years,” he said. In most traditional markets, the consumer was first. But when it comes to cryptocurrencies, “we found that companies are really being left behind. understood.”

As a result, cryptocurrencies moved too fast for traditional finance.

Or trust them for the long haul.

“Some founders who have previously run cryptocurrency businesses have actually found themselves trying to get bank accounts, pay people around the world, and receive payments from customers. Some were really in pain,” Davis said. “The same goes for payments. Again, payment companies don’t really understand you, so it’s really hard to accept payments from customers.”

This means higher fees for the assumed risk, higher foreign exchange rates, and stricter Know Your Customer (KYC) requirements.

As a result, “cryptocurrencies are underserved compared to what traditional fintech might be able to deliver,” he added. “These companies know what they have to do to get that amount — they need to get those customers — but they don’t know how.”

what collapse?

What surprised the BVNK founders was that despite the current market volatility (Bitcoin has fallen more than 50% since November), the number of consumers wanting to pay in cryptocurrencies is still positive. This is a significant increase.

This makes sense as the number of US cryptocurrency users has grown to almost 60 million in the last 12 months. according to Newly published Crypto Consumers survey by PYMNTS.

See also U.S. Cryptocurrency Consumers: Using Cryptocurrency for Online and In-Store Purchases

What is changing is the cryptocurrency you want to use for payments.

“There is still a lot of demand on the consumer side, especially for stablecoins,” Davis said. “These consumers are retreating from more volatile assets like Ethereum and Bitcoin.”

They are starting to shift to holdings such as USD Coin (USDC) and Tether (USDT), theoretically allowing money to enter the crypto ecosystem without incurring losses and without paying off-ramping and on-ramping fees. can be left.

“We are seeing huge demand and huge volumes for USDC and USDT for these businesses,” he said. “Stablecoins are more like infrastructure than investments.”

This is especially true for cross-border transactions, Davis said, noting that more and more businesses are interested in avoiding SWIFT’s fees and delays.

At the same time, “we believe that cryptocurrencies will be the infrastructure of the future, but they will not replace everything that exists today.”

Nor does he advise companies to hold as much of their assets in cryptocurrencies as possible.

calm down

BVNK focuses on the B2B side, helping businesses to accept and use crypto without having to learn new payment rails.

The chief financial officer or treasurer should view accepting or using cryptocurrencies as “no different than choosing another fiat payment method,” he said. “Our focus is to ensure that there is no difference in the evaluation flow and that the customer feels exactly the same as when paying with fiat currency.

“So we handle refund flows, we handle payments, we handle what happens when they underpay, what happens when the blockchain is slow, etc.”

KYC requirements in the world of cryptocurrency payments are getting tougher, but this is not an area BVNK is focusing on, especially as the European Union is nearing the end of its Crypto Asset Market (MiCA) legislation. Davis said he is using crypto but not touching consumers anywhere, so he is launching a low-KYC on-ramp with the goal of facilitating money transfers between accounts.

BVNK’s crypto business is currently primarily focused on mid-market European companies, but it’s starting a big push to America thanks to a $40 million Series A funding round, Davis said. rice field.

read more: Crypto Banking Firm BVNK Raises $40 Million in Series A

What he found interesting was how quick the process was.

Venture capital firm investments, until recently, have been “very focused on infrastructure, investing in companies … making that infrastructure sustainable and sustainable for the future of businesses that use this technology.” It was stabilizing.

What BVNK has found is that “there is a lot of interest in investing on the B2B side, especially as it is less susceptible to market volatility,” he said.

We are always looking for opportunities to partner with innovators and disruptors.

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https://www.pymnts.com/cryptocurrency/2022/crypto-fans-pin-hopes-on-new-uk-pm-and-regulations/partial/

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