Is Cryptocurrency the new mode of payment in diverse sectors?

Cryptocurrency the new mode of payment

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CoinLedger, a popular crypto tax software, reveals in its new study that the retail and e-commerce sector lists the highest number of companies that provide the option of purchasing using cryptocurrency. The study compiled a list of 400 major companies listed by BitPay as accepting cryptocurrency methods and categorized them into sectors, to discover which one contains the most companies offering crypto as a payment method.

What is CryptoCurrency?

Retail and E-commerce Industry

Retail & e-commerce take first place with a total of 76 companies accepting crypto payments. The sector includes clothing and accessories stores like Adidas, Yankee Candle, and H&M, as well as online shopping platforms such as Etsy.

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Food and Dining Sector

The food & dining sector follows closely in second with 72 companies. Examples are Chipotle, Chuck E Cheese’s, Hard Rock Café, and delivery services such as DoorDash. Chipotle accepts digital payments including crypto through Flexa-enabled apps. 

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Payment Options other than Crypto

  • Prepaid cards were being used as shadow currency long before Bitcoin was invented. Their current and continuing popularity in crypto is because prepaid offers many advantages over on-chain tokens. 
  • Unlike crypto, an electronic retail voucher can be redeemed near-anonymously, instantly, at face value. Purchases and transfers are largely untraceable. 

How to buy anything with Cryptocurrencies? 

Compliance measures adopted in regards of the usage of cryptocurrency

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  • An investigation published by The Intercept in 2018 described how users were swapping Bitcoin for gift cards on peer-to-peer marketplaces at a premium to the market price. Many retailers have since tightened security on card purchases, including by putting restrictions on top-ups and blocking the purchase of cards with cards. 
  • Regulatory efforts have focused on warning about consumer confidence scams and limiting opportunities for money laundering. 
  • Bitrefill of Sweden, which says unverified customers can make up to 15 purchases a day to a value of $5,000, or $10,000 a month. 
  • Coinsbee, based in Germany, says in its FAQ that it applies no KYC checks below €1,000 per transaction up to a total value of €10,000. 
  • Live On Crypto, an alt-coin issuer that says it supports food banks, its gift-card shop asks for “no personal information on sign-up and checkout”.
  • Among big centralized crypto exchanges, only Binance offers crypto gift cards, having launched a product in June 2023.
  • Paxful, the US-based P2P marketplace named in the Intercept article, allows crypto sellers to accept as currency up to 133 brands of gift cards. 

While crypto is gradually being legislated into the financial mainstream, gift card law can look behind the curve. Electronic money laws in the US, UK, and EU apply only to general-use prepaid debit cards. Vouchers tied to a single retailer are considered instruments of stored value, not payment instruments, so their sellers can avoid many of the reporting requirements placed on money transmitters. 

Trade groups including the Electronic Money Association and EuroCommerce have called for the EU not to make gift card customer identification mandatory as part of an update of AML rules. The EU proposed in February that any exemption would be “conditional to strict limits regarding the maximum value of the product, its exclusive use to purchase goods or services, and provided that the amount stored cannot be exchanged for other value.” Tighter caps on gift-card values would be unlikely to have much effect on customers of Adidas, Chuck E Cheese’s, Yankee Candle, and Hard Rock Café.