With the arrival of cryptocurrency, the entire B2B landscape began introspecting the proposition of cash becoming obsolete in the digital age of electronic payment processing. Whether or not that might be the case, using cryptocurrency in B2B payments not only provides a less expensive, faster, inexpensive & more efficient alternative to cash but also safeguards the privacy of customers while executing transactions.
What is Cryptocurrency?
A cryptocurrency (or cryptocurrency) is a digital asset that can be leveraged as an exchange medium. It secures financial transactions, controls the creation of additional units & verifies the transfer of assets using strong cryptography. Cryptocurrencies employ a distributed ledger technology, typically a blockchain, exercising decentralized control as opposed to centralized digital currency & central banking systems, to typically serve public financial transaction databases.
Cryptocurrencies started proliferating since the arrival of Bitcoin in 2009 & have been constantly in news. Besides, Bitcoin, Litecoin, Ethereum & Ripple are the other common cryptocurrencies.
An issue of MIT Technology Review in January 2019 had reported some cryptocurrencies having lost nearly all of their sky-high value over the past 18 months. However, that doesn’t at all mean that cryptocurrencies have lost values for B2B payment processing.
The International Monetary Fund (IMF) published a scholarly paper that advocated central banks issuing digital currency.
The paper inspected into the likelihood of “a widely accessible digital form of fiat money that could be a legal tender”.
Moreover, Christine Lagarde, the then Managing Director of IMF at the time of publication of the scientific paper, gave a speech titled "Winds of Change: The Case for New Digital Currency," wherein she eulogized the virtues of the use of cryptocurrency in B2B payments explaining that it may provide greater privacy, security, & enhanced customer protection.
How Marketers can Employ Cryptocurrency in B2B Payments
Cryptocurrencies are a fundamentally digital form of peer-to-peer payments and can be used to simplify B2B payments. They don't have physical counterparts like euros or dollars, and exist only within the digital realms, having a null innate value like usual currencies, gold or silver. Moreover, no central bank, financial institution or government is responsible to control the supply of cryptocurrencies.
Cryptocurrencies have evolved with time to eliminate the risks in B2B transactions. However, most of the B2B marketers are yet to decode cryptocurrency. They must, however, take the calculated risk of adopting cryptocurrencies because of the following benefits:
1. Employing Cryptocurrency in B2B Payments Helps Avoid Fraud:
Most of the B2B payments are made in the form of checks, credit cards, money orders, wire transfers or in the form of cash. Most of these transactions are government-regulated & there might be one or more intermediaries involved; potentially risking the transactions to fraud.
The transactions involving cryptocurrency are comparatively secure. They occur without banks or financial institutions and employ the blockchain technology. Blockchain is a distributed ledger technology. The cryptocurrency transactions are direct & are executed & verified using an algorithm distributed on every node on the network. Thus, employing cryptocurrency in B2B payments along with the blockchain technology alleviates the pain-points related to fraudulence, making the transactions completely secure.
2. The B2B Payments involving Cryptocurrency are Faster:
Employing cryptocurrency in B2B payments ensures that the transactions are faster than those done by the means of conventional payment methods such as checks, ACH and wire transfers. As transactions involve fewer players the processing fee is less.
3. Cryptocurrencies Assist the Transfer of B2B payments Globally including the third-world Countries:
Cryptocurrencies facilitate international B2B payments.
According to a report by PYMNTS.com, the geographical hallways witnessing the maximum uptake in blockchain/crypto payments include the transfer from Asia to Europe, from Asia to the U.S.A & from Latin America to Europe; with the highest number of transactions being popularized by importers & exporters.
Using cryptocurrency in B2B payments allows marketers to transmit payments globally in multiple countries with complete security and without the interference of banks or governments. Thus, cryptocurrency has emerged as a resolute, secure & interesting solution for processing B2B payments in the emerging global markets and third-world countries. All the marketers need is a computer and an internet connection. Moreover, as the cryptocurrency transactions are irreversible without the consent of the receivers the risks of fraudulence & chargebacks are mitigated which benefits B2B marketers.
4. Exclusive Discrete Ownership:
One of the greatest advantages of employing cryptocurrency in B2B payments is that an individual user remains the sole owner of the corresponding public & private encryption keys that comprise the cryptocurrency network identity or address; except when he delegates the management of his wallet over a third-party service.
Under the conventional banking or credit card, set-up, users can effectively turn the stewardship of their funds over a third-party. This poses a risk to their assets.
Accounts might be closed without prior notice owing to the infringements of the Terms of Service of a Financial Institution. Under such circumstances, the account holder may find it difficult to jump through hoops to establish themselves back into the system.
According to Finjan Cybersecurity, there are more than 1200 unique cryptocurrencies or altcoins in circulation across the globe.
Although many of them may be ephemeral, the cryptocurrency phenomenon is overall flexible & is here to sustain, perpetuating its resilient nature.
According to a report by Investopedia, there might be several developments in 2020 that could impact institutional participation in the digital currency market.
“Privacy coins” may be used to mask your identity on blockchain and supply chain tokens facilitating supply chain operations for an array of industries.
Once marketers understand the benefits of using cryptocurrency in B2B payments, applying the new technology wouldn’t be much of a challenge. The new marketers can take their lessons from the early adopters who already have been using cryptocurrency in B2B payments. They should also frequently monitor both cryptocurrency & blockchain technology & should be wary of the potential risks involved in terms of volatility, government regulations & competing currencies.
Cryptocurrencies were once positioned to flip-over the entire financial system. There is a strong probability that if any digital currency witnesses dramatic price gains in 2020, cryptocurrency will emerge more powerful than ever. Even blockchain, the framework technology behind cryptocurrencies, will continue to evolve in the year 2020 & beyond. Employing cryptocurrency in B2B payments seems to be a sane option, it acts as a shield against fraudulence, safeguards faulty account tampering attempts, & guarantees of customer privacy.
Valasys Media is a well-known name offering highly regarded & tailored B2B services for marketers, which includes lead generation, account-based marketing, lead nurturing, event promotion services, list building services & content syndication services. Our services have been designed to empower B2B marketers to hustle towards their core bottom-line objectives.