Cryptocurrencies in e-commerce

Incorporating bitcoin and cryptocurrencies as payment methods in e-commerce and at POS, and the associated challenges.

E-commerce is booming in Switzerland. Online retail has increased massively in this country since the start of the pandemic and, according to a study by Zurich University of Applied Sciences, is showing encouraging growth rates. The development of online shops in recent years has also led to more people feeling comfortable shopping online and making digital payments.

A possible enhancement to services from an e-commerce shop would perhaps include incorporating additional payment methods and offering payment by bitcoin or other cryptocurrencies.

Should I be offering bitcoin as a payment method in my online shop? Doesn’t that involve high risks?

Two reasons to offer cryptocurrencies as a payment method in e-commerce:

1. Reaching new target groups and establishing a position in a growing market

The number of people who own bitcoin or other cryptocurrencies, or at least take an interest in them, is increasing. Pioneers in the canton of Zug (in German) and, since March 2022 in the canton of Lugano, are establishing bitcoin as an official payment method with Plan ₿, and are enabling people to pay taxes, tuition fees and other public services digitally. Bitcoin and other cryptocurrencies can be purchased easily at all SBB terminals or at one of the many bitcoin ATMs (in German). In 2017, family business Lehner Versand (in German) was one of the first mail-order companies in Switzerland to accept bitcoin as a payment method. Since 2019, Digitec Galaxus has also been accepting payment using bitcoin, Ethereum, Ripple and Litecoin. Otherwise, bitcoin has not yet firmly established itself as a payment method in Swiss e-commerce.

2. Sharing the volatility risk with a partner

Cryptocurrencies like bitcoin are subject to severe exchange rate fluctuations and are highly volatile. Services like Bitcoin Suisse Pay for eCommerce from Bitcoin Suisse or WL Crypto Payments from Worldline, a product from Six Payment Services, have identified this problem and are offering appropriate solutions. Both providers guarantee straightforward integration into the existing payment system and cushion against the volatility risk by fixing the exchange rate automatically at the point of ordering and completing the transaction within seconds. This is enabled by immediately insuring the payment transaction after confirmation of payment, which means that no foreign currency risk arises for the online shop.

The fact is, accepting cryptocurrencies as a payment method in an e-commerce shop or at a POS can attract new customer segments at relatively little expense or effort. Payment using bitcoin and the like offers a convenient and simple payment option for a digitally savvy target group with considerable purchasing power. Also, the associated perception as an innovative company can positively support your position on the market.