Late last year, Deloitte, collaborating with PayPal, surveyed 2,000 retailers about plans to support digital currency payments. It found that 85% anticipate that digital currency will be ubiquitous within five years, with suppliers expected to accept stablecoins and other cryptocurrencies. The survey also revealed significant interest in adopting digital currency in the finance function, with two thirds expected to within the year.
Sentiments around stablecoins versus other cryptocurrencies were not significantly different, with enabling crypto payments more generally seen as a bit more important. The critical driver is customer demand, with 64% already seeing significant interest from consumers and 83% expecting interest to increase over the coming year.
By adopting cryptocurrencies, retailers believe they will improve customer experience, broaden their consumer base and enhance their brand’s positioning as cutting edge.
In terms of investment to support digital currency payments, most retailers were spending between $100,000 and $1 million, but 54% of larger retailers with sales above $500 million are planning to spend more than a million dollars. The vast majority (62%+) are partnering with digital currency payment processors. The rest are split between partnering with traditional payment processors and developing functionality in-house. However, the in-house group also partners to convert from digital to fiat currency.
Integrating digital currency into the finance function
Initially, the primary driver of digital currency adoption was customer-facing applications. Immediate receipt of the funds is also a major attraction compared to waiting for card acquiring companies to release the funds.
But Deloitte reports significant interest in incorporating digital currencies within the finance function, such as for treasury. And 85% expect their suppliers to accept stablecoins and cryptocurrencies within five years.
More than a quarter already support digital currencies within finance, and that figure will be almost two thirds within a year — the rest plan to support crypto within four years, with just one percent having no current intention.
In terms of holding stablecoins as part of the company’s treasury, it will only be possible to reap the full benefits if stablecoins are widely adopted in supply chains and wholesale markets.
Despite the upbeat sentiment, there are still some barriers to adoption. The top three are viewed as security of payment platforms, changing regulations, and the crypto market’s instability.
PayPal’s crypto progress
PayPal started enabling its merchants to accept cryptocurrencies last March. It’s exploring issuing its own stablecoin and is keen to become a central bank digital currency (CBDC) wallet provider.
Yesterday it confirmed that it had been granted a full Bitlicense by the New York Department of Financial Services (NYDFS).
Until now, cryptocurrencies bought via PayPal could only be spent or sold via PayPal. Yesterday it started to enable transfers to and from external crypto wallets, as well as transfers to other PayPal clients.