In the 17 years since the first bitcoin was mined, cryptocurrencies have been labeled everything from a passing fad to the next big thing. In recent years, latter view has gained traction, driven largely by the rise of stablecoins and increased institutional investment.
And yet, widespread crypto payments at retail points of sale have remained elusive. That may be starting to change, according to research by PayPal and the National Cryptocurrency Association. The study found that around 39% of merchants already accept crypto, including roughly half of businesses generating more than $500 million in annual revenue.
“Merchants, especially the large enterprise retail brands, are always looking for ways to improve their customer experience and drive incremental sales, and customer payments are an important part of that process,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “Crypto continues to become more popular with consumers, and in turn that will continue to drive its popularity with merchants.”
Attracting Sought-After Customers
Customer interest has played a key role in this growing acceptance. Most merchants surveyed said inquiries about crypto payments were common, and those questions often came from highly sought-after younger customers in the millennial and Gen Z demographics.
Beyond attracting and engaging younger customers, merchants cited transaction speed and security as key benefits of crypto payments, which typically settle in near real-time on transparent blockchain networks. These advantages extend to cross-border payments as well, potentially opening up meaningful new markets for merchants.
Given these benefits, roughly 84% of respondents believe crypto payments will become common in the next five years.
Doing the Heavy Lifting
One reason crypto payments haven’t seen broader adoption to date is concern over the volatility of many digital assets. However, as major payments players have built out crypto infrastructure in recent years, they have increasingly removed conversion and volatility management from merchants’ responsibilities.
For example, Visa recently launched a stablecoin acceptance platform that allows merchants to accept cross-border stablecoin payments without handling tokens directly. PayPal has also launched a crypto platform that does the heavy lifting for merchants, allowing them to accept payments in over 100 cryptocurrencies from leading wallets like Coinbase Wallet, MetaMask, and Kraken.
With strong demand from consumers and growing enablement on the merchant side, mainstream adoption of digital asset payments at retail appears closer than ever.
