Buy a soda from the corner store in downtown Chicago using Mexican pesos isn’t likely to happen. The cashier won’t refuse because the peso doesn’t have value. That’s not the problem.

Rather, the peso won’t be accepted because its value can’t immediately be recognized by the store. It's a foreign currency and doesn’t integrate with its existing payment processes. If the store were to agree to it, the peso could be accepted, likely requiring it to be taken to an exchange for U.S. dollars. That’s quite the hassle for the few people who would be looking to spend pesos in Chicago. While the example may sound ludicrous, most retailers look at cryptocurrency in the same way.

Currently, a little more than 13,000 businesses accept crypto worldwide. For comparison, Manhattan alone is home to over 300,000 businesses, so it’s a tiny fraction. Adoption remains low because crypto is still too complicated: There are too many coins, too many questions, and too few incentives to induce retailers to accept cryptocurrency as a payment type. It’s a common attitude, but that doesn’t mean it can’t be changed.

If crypto in retail is ever to be more than a novelty, it needs to deliver value to merchants and give them a reason to embrace it. Historically, retailers have accepted new payment methods when directed by law or when that form of payment created a direct financial incentive for them to do so. As it stands now, crypto meets neither standard, but it’s still too early to count it out.


Crypto’s Benefits to Retailers’ Bottom Lines

Payment fraud plagues the industry, and it’s on the rise. By one estimate, each dollar of fraud costs retailers almost $3. Fraud also affects consumers and banks, suggesting that the current payment system is not as strong or stable as many might think. Crypto promises to drastically reduce fraud through the security of blockchain technology.

Because blockchain creates an immutable record of all transactions, it’s almost impossible to scam the system. Blockchain can also be leveraged to increase speed and efficiency, making payments securer and faster at the same time. Those benefits go directly to the bottom line while enhancing the customer experience.

Despite these advantages, few mechanisms exist to make crypto usable for merchants. One cryptocurrency moving in the right direction is Dash: For consumers and retailers alike, transacting with Dash is as simple as using a Visa card. With the right technology and education, crypto transactions could require very little from merchants if some of the other inconveniences were removed. With the right approach, the advantages of crypto acceptance could quickly outweigh the current reasons for its rejection and provide financial savings to the current losses due to fraud.

How Crypto Eases the Future of Payment

Crypto shouldn’t be viewed as simply another payment option because it offers advantages over cash, credit, and debit. Even if consumer demand is nowhere near reaching a tipping point, retailers must understand that crypto uniquely improves on the future of payment in two ways:

It allows for a universal currency. Cryptocurrency is a little like the euro: It integrates multiple currencies under a common set of standards. As a result, retailers can seamlessly serve a much larger group of consumers. Retailers have an obvious incentive to eliminate any friction from the payment process, and crypto breaks down the significant barriers between international currencies. Payment is finally unified so that no customer is ever turned away.

• It helps retailers prepare for cyber offensives. Identity fraud alone cost consumers $16 billion in 2017. Cybercrime affects almost everyone because defenses often fall short. Consumers are understandably wary about digital payments, and retailers are eager to avoid embarrassing privacy breaches. Crypto and blockchain allow retailers to verify identities before authorizing transactions, slashing fraud risk. Problems that make other payment systems unreliable and untrustworthy are largely irrelevant with crypto payments.

Recently, many have forecast the looming death of retail. The end is probably not near, but retail is undeniably changing. Crypto payments are not a panacea for the problems that retailers face, but they do pave the way for the retail of the future. Within the right network, crypto has the potential to make payments convenient and safe. When tomorrow’s consumers are ready to spend their proverbial pesos at the corner store in Chicago, the outlets with crypto at the register will begin to look a lot more compelling.