18th April, 2022
The role of crypto assets in how they can shape up a transaction is of paramount interest to travel e-commerce players. It could be a transaction that directly features crypto or even a crypto credit line that is behind the transaction.
The evaluation of factors as a merchant not only pertains to crypto acceptance for transactions, how PSPs are building crypto capabilities, progress made by crypto PSPs and even how the likes of Visa and Mastercard are paving way for consumers and merchants to transact in crypto, but also how crypto is resulting in other monetary activities, for instance, this digital asset can serve as a collateral for crypto loans.
Another aspect that is being scrutinized is the development of payment infrastructure. All of this is vital considering how digital assets are becoming entrenched in global financial markets.
Role of crypto in completing a transaction
Today merchants have the option to receive payments directly in crypto-assets or receive funds via traditional payment rails following conversion of the crypto-asset.
Another highlight is credit against crypto-assets.
Few days ago Nexo, along with Mastercard and DiPocket, announced the launch of what is being described a first-of-its-kind crypto-backed Mastercard card in select European markets that allows users to spend without selling their digital assets. It allows cardholders to use their digital assets as collateral rather than selling them. The credit line is dynamic and can use multiple assets as collateral, including but not limited to Bitcoin, Ethereum etc. What stands out here is the progress in terms of raising everyday utility for the emerging asset class.
Concerns
There are certain apprehensions that remain and are being debated. One of them is whether the use of bitcoin as a currency may add to economic instability. Another one is mining process being energy intensive, and such assets being vulnerable to jurisdictions’ climate policies. Then there are talks about lack of clarity over crypto-asset market structure and functioning and certain regulatory restrictions (taxation, banking restrictions, mining restrictions etc.), AML risks and other issues that are main reasons behind low merchant acceptance for crypto payments today.
But it remains a fast evolving arena.
Merchants need to be updated about all the developments especially that can help in improving upon the customer experience. It is vital to assess the role of rails that may be necessary to take us to the next technological era or avoid risks that may result owing to under-regulation.
By Ritesh Gupta, Ai Team
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