Cryptocurrency vs. mobile wallets – which digital payment solution is right for your business in the future?
The days of hauling around a fat, overstuffed wallet are drawing to a close. Thanks to mobile wallet services like Apple Pay and Google Wallet, consumers don’t need to jam all of their credit cards, debit cards, coupons and loyalty cards into their pockets before venturing out of the house. And thanks to highly-secure and globally-accepted cryptocurrency, consumers are able to make anonymous transactions with retailers and service providers anywhere in the world.
While mobile wallets and cryptocurrency have been slow to get off the ground, it is estimated that in-store mobile payments will grow by 154 percent, reaching almost $200 billion by 2018.
How can small business capitalize on this growing trend and make the post-wallet economy work for them?
Making Cryptocurrency Work for Small Business Marketing
Cryptocurrency, made famous by bitcoin, is a peer-to-peer digital payment network that bypasses the traditional banking system. There is no actual exchange of currency. Consumers go through a secure transaction log to transfer their “virtual currency” to a business in exchange for products or services. The transaction works like a straight-cash transaction, with absolutely no paper trail, making it highly secure. Cryptocurrency is not without its drawbacks, but many small businesses are making an effort to reach out to new customers by accepting virtual transactions.
There is a right way and a wrong way to go about marketing the cryptocurrency-friendly status of a business. Take, for example the tale of one Irvine, California dentist on Reddit. When his practice chose to accept bitcoin, he took his marketing social media. At first blush, this sounds like a sound strategy. Customers who use bitcoin are likely consumers of social media and Reddit is a hub of bitcoin-related conversation. However, his approach may not have been ideal. The dentist made two posts to Reddit. In the first, he wrote as himself, announcing his acceptance of cryptocurrency. In the second, he posed as a customer who claimed to have used bitcoin to pay for services.
The Reddit audience is savvy, and they caught on to the ruse rather quickly. While the execution was off, the dentist’s instinct was right. Small business marketers should view their social media fans and followers as a natural audience when it comes to marketing cryptocurrency acceptance, however a straightforward approach may be more effective and sustainable over the long-term.
Since cryptocurrency transactions cost a business less than traditional credit card transactions, it could be a financially sound move to offer unique deals, discounts, and promotions to customers who choose to pay for services with bitcoin. While credit card transactions can be as high as two to five percent per swipe, cryptocurrency transaction fees run as low as one half of one percent. Calculating the fee difference, businesses can create deals that will still allow them to maintain high transactional margins.
Improving Customer Experience With Mobile Wallets
Accepting mobile wallet transactions has been widely touted as a more secure option to credit card swipes in-store, and when customers use a mobile wallet, the onus of security falls squarely upon the shoulders of the wallet provider like Apple Pay or Google, which reduces business risk. This works as a win-win for both the customer and the business.
Mobile wallets are fast, convenient, and in today’s seemingly endless cycle of retail cyber-attacks, they are (so far) secure. They also give businesses a host of new ways to connect with customers. Mobile services can be used to generate unique deals and value-added programs such as:
- Mobile-based loyalty rewards programs.
- Mobile-exclusive coupons.
- Location-based offers that alert shoppers to a deal when they are near a store.
- Real-time opportunities to comparison shop.
- Secure receipting processes.
Technology has given consumers far more options when it comes to making secure payments. Driving customers to use post-wallet technology like cryptocurrency and mobile wallets is about more than just offering those options. Savvy businesses use technology as a springboard to get out in front of new customers, make stronger connections with existing customers, and increase share of wallet in ways that are simply not possible with traditional transactions. Marketers who can provide the value-added services their customer base is looking for will be able to engage their customers in new and exciting ways.
Learn more about cryptocurrency vs. mobile wallets in the below infographic “Living in the Post-Wallet Economy“.
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