From small merchant businesses to the commanding card brands, awareness of cryptocurrency in payments is high, implementation at the POS has been rising, and only a small percentage of merchants surveyed recently indicated they see no need to ever accept cryptocurrency payments.
However, extreme volatility has lowered the value of some cryptocurrencies and erased the value of others such as Luna, the Terra ecosystem's stablecoin. This situation is steering many individuals and businesses away from cryptocurrency payments. With that in mind, we asked The Green Sheet Advisory Board members the following questions:
This article shares responses from a portion of Advisory Board members. Further insights will be published in our June 27, 2022, issue.
Please allow me to answer your questions with a little bit of merchant processing and business history. Assuming the past is the precursor of the future, we need to jump back before we can long-jump forward.
Having been actively involved in the bankcard industry for 37 years, I have seen a thing or two (or 10 or 20, hundreds actually) changes during my tenure. I would say one of the biggest and first major changes was the then "card associations" (Mastercard and Visa) adding a $0.10 per transaction fee to every transaction. We went nuts as we thought it would make it harder for us (salespeople) to make a sale. Long story short: it didn't, and we figured out a way to incorporate it into our presentation, and we kept selling.
Let's talk about those merchants that "see no need to ever accept cryptocurrency payments." Back in the mid/late 80's when I was walking the pavement, I had an appointment with a local movie theater in Tarzana, Calif. I remember saying to the owner, "Accepting credit cards is the way of the future and if you don't accept credit cards you will not be in business." I remember the guy patting me on the shoulder and saying, "Son, the movies is a cash business, always has been, always will be." I replied respectfully, "Sir, if you don't take credit cards, you won't be in business." I recall going to a movie there years later using my credit card and laughing to myself because the new owners accepted credit cards.
Another and more recent example is Sears. For you youngsters, Sears was a staple of America, an anchor store of every major shopping mall. For many of us, a Sears card was our first credit card (well, it was mine anyway) and I had a $300 limit. The thing was that Sears only accepted its own card. It was cash or your Sears, Roebuck credit card, and that was it.
Well, guess what? That's right, boys and girls, in 1993 (100 years after opening its doors) Sears started accepting Mastercard, Visa and American Express—and if it hadn't, it wouldn't have survived another year. To address the first question, we can apply the "chicken and the egg" conundrum. Merchants won't accept without customer demand, and conversely consumers can't (or won't) be bothered to get one (a bitcoin or any cryptocurrency) if merchants don't accept them.
I think that one of the main challenges is that we can "buy" cryptocurrency; you can't go into a bank and buy money. Maybe the next generation of consumers will be used to this, but today; you and I, we must work to get money (unless you're a trust fund kid). Remember when we used to go to a place 40 hours a week and get a paycheck? Now we just walk down the hall to an unused room in our house or apartment in sweats for 40 hours a week (or more) and money appears in our bank account.
Question 1: I'm not adding cryptocurrency to my suite of offerings because to be honest I still don't get it, and I haven't been asked by even one merchant about it.
Question 2:In the future, I think that the card companies will each have their own "coins." Mastercard and Visa are already working on this, and the future will be reality. I just don't know if it will be a reality before I check out.
Question 3: The biggest challenge is me. If I don't understand it, I can't sell it, but that's me. We help merchants accept all forms of payment other than cash. I understand that cryptocurrency isn't cash, but as I see it today, it can blow my sale because if I bring it up, there goes that sale. And if they bring it up, well, there goes that sale. Until the card companies have it and the government can figure out how to tax it, I'm not bringing it up.
Question 4: I don't see additional complementary products, but that doesn't mean there won't be any. What we are seeing with distributed ledger technology can be compared to what cavemen saw with the wheel, or the Wright Brothers building a flying machine. It's innovation moving at lightspeed.
Question 5: I think that a few generations of people will leave this planet (die) before we become a truly cashless society. The evolution of money as we know it has changed over the past thousand or so years. A coin, a piece of paper, a piece of plastic, a series of numbers or a string of code generated by a computer today is a unit of measure. But does it have value? Well, if I have five shells and you have five bananas and you are willing to exchange those bananas for the shells, the shells have a value. As a people we used to save money in jars buried in the backyard, because such money has/had a value.
Does anyone here remember gold and silver certificates? In my life I have seen the evolution go from cash in my front pocket to cash in my wallet where I also kept my credit cards. Today I have a picture of my credit cards in my virtual wallet in my phone, and I don't need to go out to buy anything. Thank you, Amazon.
There was a study done many years ago where a group of people were asked, "If you were five miles from home and realized that you forgot your wallet, would you turn around to get it or would you live without it?" About 90 percent of the people said they wouldn't turn around to retrieve their wallet.
The same group of people was asked, "If you were five miles from home and you realized that you forgot your cell phone, would you turn around to get it or would you live without it?" About 90 percent of the people said they would go back to get their phone.
Money allows people all over the world to trade goods and services indirectly; it helps communicate to others what you (or I) are worth. Until every person on the planet can have one (a coin of some sorts) in your pocket, purse, wallet, virtual wallet, or the payment chip implanted in your fingertip, money as we know it today will not be replaced.
Yesterday I had a million dollars in the bank, and I still do today. Six months ago I had 100 bitcoins, and I was worth $6.4 million, and today I am worth $2.9 million. But I still have my million dollars cash in the bank, and it is still worth a million dollars. I own stock in various companies, but I can't use that stock to buy a car like I can with bitcoin. That's the difference. I must sell the stock and convert it into cash to buy something, versus owning a bitcoin that can be used to make a purchase.
Question 1: No, yes and yes. We're a Prime Time host, and Crypto isn't ready for a spot in our lineup.
Question 2: Nothing yet, and we'll leave it to those higher in the food chain to decide.
Question 3: I would expect merchants and their customers to be skeptical, and education to be key. If Wells, BofA and Chase bring it into the mainstream, we'd try it.
Question 4: No, but my 65-year-old (until recently cataracted) vision is limited in this regard.
Question 5: If they are cashless, and they engage, then of course they will.
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