I asked my webmaster last week about adding crypto as a payment option for our website. His immediate response was "It's used by criminals and dodgy types, and will harm your reputation". I guess he has bought into the FUD in a big way, but it's a good illustration of what we are up against.
So this blog post is a follow-up on two of my previous ones, links at the bottom of this post if you're interested in reading them. The first was on why e-commerce hasn't embraced crypto payments, and the second was a quick review of the most popular WooCommerce plugins for crypto payments. In turn, I feel that the problem can be broken down into two issues; having a solution that works for the e-commerce businesses, and educating the customer base to have the confidence to use crypto as a payment method. I'm only going to deal with the first one in today's post !
Having reviewed the most popular WooCommerce plugins, I came to the conclusion that while some of them look good, none of them are prefect (hey, no software ever is !), and most of them had at least one "show-stopper". So for anyone more talented than I am who is reading this, who has the ability to design WooCommerce plugins, here is my personal "wishlist".
It is essential that the plugin provider can be trusted to be a reliable long-term partner, and also essential that retailers can be confident that they'll get their funds. Even the slightest hint of some kind of rug-pull or delay in payments will have people running scared.
To be fair, this is something that most of the plugin makers already do a reasonable job of. They adopt one of two approaches; either they are already well known and have a reasonable reputation (e.g. Coinbase), or the payments received are sent straight to your own wallet rather than held by the plugin provider.
One issue that does break trust is that several plugin providers have a minimum threshold before they pay out, which has definitely created some significant trust issues particularly where it's buried deep in the Terms & Conditions rather than made clear before sign-up. It may be for a good reason, but they need to be up-front about it !
It needs to be a solution, not a middleman
In the longer term, I can see someone like PayPal or Stripe integrating a crypto payment option to their existing solutions. If (and only if) both prices and policies were sensible, I could see them rapidly becoming dominant. Their experience with payment solutions, their size and normal reliability will give them a huge edge.
But I don't believe this would be a good thing. Sure it would be convenient, but sometimes we have to give up a bit of convenience, otherwise we become slaves to someone else. Companies like PayPal have strong centralising tendencies; they love to dictate policies to their business customers and have a reputation of closing down anyone selling products they don't like or having political views they object to.
So my ideal solution would be one where we pay a one-off fee for a plugin, with an option for paid support (but with decent response times at a reasonable price !). The price should include the cost of periodic software updates, at least for a year or two. Once the plugin is installed, it should just act as a mechanism to carry out transactions, not a middleman; this is why I prefer solutions that pay direct to a wallet, rather than holding a balance on an exchange.
Simple to implement and operate
Whatever solution is adopted, it needs to be simple to implement. Website owners have a thousand different plates to keep spinning, and mases of different calls on their time. My ideal implementation is something where I can enter brief information about our business, tick a few configuration boxes, do a couple of quick tests to make sure it all works, and then move on to whatever crisis has popped up while I've been doing that !
From an operational perspective, it needs to perform just like any other payment processor. The customer should add products to a basket, go to a checkout, and pay. The business should pick, pack and fulfil the order just like any other. No messing around with manual invoicing and manual payments. Any delay in receiving payment can be built into the process in exactly the same way as when a normal fiat payment takes a few minutes to go through. The whole thing should be simple and smooth, it's not really that different on an operational and accounting level to taking a foreign currency transaction.
Transparent and predictable fees and exchange rates
A weak point of all the plugins I looked at was a fairly loose approach to the fees they charge. The fees fall into two types; the fee charged by the plugin provider for processing the payment, and fees or gas to actually get the payments into your wallet. There is also a question of what rates you are getting when payments are made in altcoins; it's not always easy to verify whether you are getting the actual rate, or one adjusted to slice a bit of extra profit off for the plugin provider.
I get that gas fees are out of the control of the plugin provider, but everything else should be very transparent. E-commerce can be highly competitive, meaning that margins are often wafer thin. A 1% variance on the revenue received can be the difference between making a profit or a loss. So although it's counter-intuitive, I would rather see a combination of the fees and exchange rates used to provide a more consistent price, perhaps automatically adjusting just once per day or something. I think of it not as hedging, but as smoothing. Provided both retailer and customer know exactly what they are paying, with clear exchange rates quoted for the customer and an honest explanation of why this might not be identical to the figure they see on their exchange, it is fair.
The fees still need to be reasonable, and should be "all-in", covering everything up until the point where it lands in your wallet. Here in the UK PayPal generally charges 30p plus 2.9%, which is exorbitant for the service they provide. I would be disappointed if a crypto payment plugin cost more than half that, including an amortised amount for the initial cost.
A broad spectrum of coins and tokens usable
Many of the plugins I reviewed only allow customers to use a narrow selection of coins and tokens, or have complex implementation coding required if you want to add extra tokens. With so many different altcoins out there, there's no excuse for taking a wide selection. It is fair to say that exchange-based plugins tend to be better in this regard. Ideally, the retailer should be able to select a single altcoin (even if only from BTC, BCH or ETH), and have the payments in whatever-coins converted to that preferred type before it's transferred to their wallet.
A real "nice-to-have" would be to allow part-payment in crypto, rather than it being all or nothing. I think of it as a kind of "dust-buster" mode. That way, (as an example) people using the Brave browser could use up whatever BAT they have lying around, and then pay the balance of the order in another alt-coin or even (shock, horror !) fiat currency.
So that is what I hope to get from a crypto payment setup on our website. With any luck, someone will design it sooner or later ! Now I'm going to go away and think about what it would take to break down customer resistance to paying with crypto.......