Long before Bitcoin, cash was king. With the dawn of credit cards spending behaviors surged, as the plastic held no intrinsic value, and provided extra time to pay. The caveat? Finance charges! Debit cards eliminated finance charges, and the need to carry cash, offering limited matched-spending amounts, based solely on the account’s current balance. Today, technology is looking past paper and plastic and into the ether, where a new “hypothetical” currency shapes the way consumers spend and save.
Brands are presented with opportunities to engage with customers in new ways – real-time service, and omnichannel communications – to instill continued confidence through relevant offerings and ensure flexibility to cater to today’s unique spending situations. This consumer engagement has also come with a shift in e-commerce spending related to using cryptocurrency as the new payment form.
Access to Cash Review reports that “cash use has been falling dramatically in recent years. In 2017, debit card use – driven by contactless payments – overtook the number of payments made in cash in the UK for the first time. The report said that the current rate of decline would mean cash use would end in 2026. At this rate, within as little as 15 years, businesses globally will see cash transactions account for a fraction of one-time B2C transactions. In fact, with rapidly expanding B2C e-commerce transaction options businesses won’t be as interested in keeping cash due to the large cost of managing it.
Bitcoin’s Tech-Savvy Blockchain Integrations
In January 2019, the new medium of monetary exchange became available to the world. Labeled a “digital cryptocurrency,” Bitcoin allowed consumers to spend and invest in the first-of-its-kind “decentralized digital currency, without a central bank or single administrator.” Governments and financial institutions did not control transactions; instead of an intangible form of “money,” Bitcoin is digital and not subject to banking policies.
There is no limit to who can buy, sell, or invest in Bitcoin. As consumer spending and saving behaviors have transitioned from analog to digital, less cash is circulating. With secure funding sources in demand for the growing number of under-banked, Bitcoin allows anyone to break free of financial insecurity. And that is good news for businesses.
Bitcoin is just as volatile as any other buy-sell investment trading strategy. Still, from a business standpoint, Bitcoin is worth investing in for the customer’s experience because of it’s self-policing peer-to-peer blockchain encryption.
Blockchains record the data of every B2C and peer-to-peer transaction, then stores, and locks it by encryption on an electronic ledger. Changes made to the information are stored on a new block, with only the latest version accessible to users with a personal key to unlock the information. Removing the third-party “overseer” like a financial institution creates a more trusted buying market.
Bitcoin Offers Consumers More Control
Despite Bitcoin’s volatility, the customer experience in 2020 disrupts financial institutions to the advantage of the businesses willing to invest in cryptocurrency. Considering that Bitcoin gives “consumers control over their personal data and more self-service options,” it’s clear how transformative Bitcoin is as it relates to positive customer experiences. Successful business is about customer engagement. Two-thirds of companies compete on the quality of their customer experience, and 96% of consumers agree that customer service is key to their purchase decisions.
Financial institutions drive the payments industry, and hold the most significant amounts of wealth. Consumers are learning to categorize a “less-cash-for-more-digital-driven-payment” option. By 2035, 90% of all transactions will be mobile and contactless. Investing in Bitcoin’s customer experience allows consumers a higher security level, offers quicker transactions, and requires two things: a cell phone and the internet.
Bitcoin provides cheaper and often low-fee international monetary transfers and is inflation-resistant; therefore, “Bitcoin will always retain its value, and make viable alternatives to traditional currencies in countries where hyperinflation is rampant.” Beyond Bitcoin’s compatibility conducting everyday, practical business transactions, it can encrypt doctor-patient communications and can be used to provide essential services for the underprivileged to receive social services.
Bitcoin offers Enormous Implications for Businesses
For a business to remain successful in a quickly evolving digital e-commerce market, a business must focus on six influential factors: response time, friendliness, convenience, atmosphere, expectations and the product itself. In the process of utilizing Bitcoin’s peer-to-peer interactions this focus “improves access for disadvantaged underbanked customers, makes the business more accountable, increases security in every type of business-customer interaction,” and bottom line, sells more products while increasingly gaining consumer loyalty.
“Imaging each transaction existing in an external, decentralized way, on the blockchain,” a new form of peer-to-peer exchange creates a world of possibilities for customers, and has “enormous implications for businesses.”
- Sending and Receiving Payments – money is transferred between two parties without the interference of a central bank to hold, oversee, and approve the exchange.
- Sending or Receiving Products – tracking products end-to-end provides real-time updates of the movements throughout the entire shipment process, eliminating the need to spend extra time and resources tracking a missing item.
- Contractual Obligations – businesses and consumers can enter into “smart contracts” at the start of the transaction. If an issue arises, these contracts eliminate resource-heavy third-party involvements.
- Record-Keeping – all personal information is tamper-free, providing an ethical safety net for both parties, which exponentially increases loyalty to the brand or business.
The Evolution of a Cashless Society
Our psychological relationship to cash and how we account for our spending and saving is interesting. According to Atlanta-based psychologist Dr. Mary Greshman, that relationship “is a concept called mental accounting, [and] has to do with how we make financial decisions based on our associations with money. Those associations aren’t always rational, so the resulting decisions don’t always pay off. We treat money differently depending on how we categorize it.” When you spend with cash, you give up something to get something.
In regard to consumer evolution towards a cashless society, “For brands increasing their focus towards online retail, or going online-only, acclimating to changing consumer behavior isn’t easy. But embracing the latest technologies and understanding why customer needs have changed is essential for survival and success.” When you invest in Bitcoin, the customer experience evolves far beyond antiquated cash and fee-heavy credit card transactions. It provides a relationship with businesses with more “efficiency and freedom. What Bitcoin and blockchain technology can bring to people with their financial transactions is to a level far greater than consumers have ever experienced.”
About the Author
Mikkel Andreassen is passionate about customer experience in every color of the beautiful customer engagement spectrum. He loves building great connections with his customers, which often lead to meaningful friendships that last a lifetime and inspire his work. Driven by the genuine belief that CX is the pivotal force that drives a successful business, he is currently at the helm of Dixa’s customer experience strategy.
Twitter handle: @MikkelVes