Technology for MSMEs: Even as cryptocurrency adoption among Indian small businesses might seem a distant possibility, for now, SMBs in several other countries are looking to get comfortable with the aspect of digital currencies. In fact, in 2022, SMBs across nine markets – Brazil, Canada, Germany, Hong Kong, Ireland, Russia, Singapore, United Arab Emirates and the United States – would be exploring crypto for accepting payments. Based on a study of 2,250 small business owners in these markets published by card company Visa on Wednesday, 24 per cent (540) SMBs said they plan to accept digital currencies such as the cryptocurrency Bitcoin.
Moreover, 59 per cent of small businesses said they plan to shift to using only digital payments within the next two years or are already cashless, according to the study titled Visa Global Back to Business Study – 2022 SMB Outlook.
“Bitcoin is used to make payment without any involvement of banks and SMEs can take benefit of crypto payments as they are less complicated than bank transactions. They are fast and can help businesses to reach international markets digitally. As some businesses accept payments in crypto, their sales might also increase as crypto investors will prefer those accepting cryptos. Blockchain and crypto are the latest technology which isn’t accepted widely. SMEs can take the first-mover advantage here to attract more customers and make hassle-free transactions,” Neha Nagar, CEO & Founder, TaxationHelp.in told Financial Express Online.
Also read: Former Finance Secretary Subhash Garg suggests 3 laws to regulate India’s crypto market
The willingness among SMBs to adopt cryptos indicated the growing mainstream adoption of virtual currencies in the payment world. Globally, companies like Mastercard, Coca Cola, Axa Insurance, Tesla, Starbucks, PayPal, and many others apart from Visa have reportedly been experimenting with crypto payments. According to the study, 82 per cent of SMBs surveyed plan to accept some form of digital option in 2022 and 73 per cent see accepting new forms of payments as fundamental to their business growth.
“Certain cryptocurrencies are being accepted as tokens that customers can use to pay vendors for their goods and services. On top of it, crypto acceptance by giants like Microsoft has only added credibility to it. The biggest paradigm shift we might see in the future is the increase in demand of customers to trade and purchase in crypto which many small businesses will have to abide by to grow. The only problem with accepting crypto as payment is the volatility that comes with it which every business, small or big, will have to find a solution for,” Raj Shamani, Founder of FMCG company Shamani Industries and Angel Investor told Financial Express Online.
Also, crypto is a settlement method that is irreversible like card transactions. “The fraud rate in card transactions has a huge impact on revenue of small merchants when they are dealing online. This fear is nil in crypto as there is nothing called chargeback that exists in crypto,” Kumar Gaurav, Founder & CEO of crypto banking platform Cashaa told Financial Express Online.
In India, crypto adoption among small businesses also rests on the regulatory climate which continues to be uncertain even as the government is aiming to regulate the sector with a ban on private cryptocurrencies. Apart from the regulatory framework, the adoption would also depend on the technical capabilities, level of adoption, and awareness about new age deep technologies including blockchain and crypto apart from artificial intelligence, machine learning, internet of things, and others. Currently, the level of technology adoption and awareness among businesses for different segments including manufacturing, supply chain, hiring, exports, etc., needs significant improvement for such businesses to believe in cryptocurrencies.
In its crypto efforts, Visa had in December last year launched its crypto consulting services – Global Crypto Advisory Practice for its clients and partners such as financial institutions including banks. The offering was to help businesses “evaluate the crypto opportunity, develop concrete strategies, and pilot new user experiences and innovations like crypto rewards programs and central bank digital currency (CBDC)-integrated consumer wallets,” Visa had said. In July, the company had announced partnering with 50 cryptocurrency platforms to launch card programmes that make converting and spending digital currency easy at 70 million merchants globally.
The suggestions/recommendations around cryptocurrencies in this story are by the respective commentator. Financial Express Online does not bear any responsibility for their advice. Please consult your financial advisor before dealing/investing in cryptocurrencies.