In order to achieve more widespread usage, cryptocurrencies must first gain a broader level of acceptance among consumers. Although the number of businesses accepting cryptocurrency continues to climb, merchants who do so are still in the minority. Consumers, companies, and payment institutions hoping to integrate cryptocurrencies into their assets need solutions to make it happen. The primary challenges are:
Cryptocurrency payment system interfaces can be complex, with lengthy documentation and a multitude of service types. Confused users may be overwhelmed by their perception of crypto as being overly complicated. People need time to adjust to a new payment system and they will rarely invest that time in anything other than a simple, welcoming interface.
The most successful exchanges achieved or maintained their status by publishing a pared-down version of their portal and offering an option with reduced functionality and simplified navigation. Of course, if an interface is designed to be user-friendly from the outset, there’s no need to create different versions.
Consider the user experience—how a customer engages and interacts with a product, system, or service. The encounter includes a person's perceptions of utility, intuitiveness, and efficiency. This “relationship” with a digital service is essential for successful adoption by its users.
Hackers and fraudsters are always devising new tools and techniques to invade the servers and data of user exchanges and applications. Once a criminal gains access to customer accounts, all that remains is to withdraw currency from the wallets.
To mitigate this risk, it’s incumbent upon payment portals to upgrade their security systems as often as necessary. Ongoing training of technical and programming teams is essential and it’s imperative to implement multi-factor authentication to enable account access and confirm transaction requests. In addition to online storage for exchange wallets, customers should be offered offline storage options, as well. Currently, only a handful of exchange and payment services are able to meet these requirements.
As a form of currency, crypto is still considered mostly an investment asset because rarely does one use a cryptocurrency for a purchase without first converting to traditional (fiat) money. A few online and physical stores accept crypto payments, but it’s a short list. Mass adoption will only be possible when acceptance of cryptocurrency as a valid means of payment gains a wider foothold. The more transactions that are processed, the steadier the rise in market volume—and positive word-of-mouth—will be.
Gauging the attitude of governments and central banks toward cryptocurrency is a challenging task. Some jurisdictions seek to develop their own cryptocurrency systems; this category contains a diverse list of countries including the Marshall Islands, Venezuela, Lithuania, and the member states of ECCB, the Eastern Caribbean Central Bank. As of now, most are unable to support crypto as unregulated currency, although it could become a useful tool. The current banking system is restricted by certain territorial and temporal limits, barriers which blockchain technology has managed to bypass. For instance, it solves the problem of double-spending (verification of the transaction prior to processing to prove the units exist) and transactions can take place anywhere in the world, without location-based commissions.
Companies and crypto service providers must invest in securing the appropriate regulations and licenses for operation—requirements which vary by jurisdiction. Numerous rules apply to providing a service with cryptocurrency or even accepting it as payment in a business. Licenses are expensive and demand significant time and effort to obtain. Most governments refuse to take an explicit stance for or against cryptocurrencies and blockchain payment systems, so companies in the crypto sector are obligated to possess a high level of know-how, endless expertise, and complete confidence in their ability to monitor and respond to any changes in regulations and requirements.
Businesses interested in integrating bitcoin and major cryptocurrencies as payment options face a situation fraught with uncertainty. Accountants possess only limited knowledge of the best methods for declaring and invoicing the currency for expense reports and customers. Educating oneself regarding the existing rules is best accomplished by understanding how to manage the accounting of a business in the first place. Confusion here can compound easily if regulators employ differing approaches to digital assets market activities; an abundance of caution is advised.
A cryptocurrency payment system which aspires to become part of the traditional financial model may have to satisfy an array of divergent criteria. What might initially appear to be the responsibility of a single cryptocurrency is actually borne by the payment systems in their entirety; only those entities have the power to equate cryptocurrency with traditional money.
As decentralized finance, cryptocurrency faces a greater risk of exploitation than traditional finances. With the constant threat of crypto exchanges and payment applications being used as money laundering outlets, general customers are exercising caution in their personal usage. Instead, they’re endorsing it amongst their networks because a platform’s security identity—and possible future incidents—can destroy their reputation.
Users are even more trepidatious about peer-to-peer transactions for fear of being part of a direct transaction record with a potential culprit. Misappropriated assets carry the risk of tarnishing previously pristine units simply by being included in their eventual totals. One has to consider “money muling,” a specific type of money laundering rife with culprits who route assets and fund transfers through clean accounts and innocent people, and are rarely reported. These possibilities exist due to the lack of central oversight (an overseeing and delegating body dedicated at the statutory level) as well as central control (the inability to reverse/confiscate any suspicious virtual assets in a chain).
Despite cryptocurrency’s popularity and appeal amongst retail users and institutions alike, it is a sunrise segment; to meaningfully contribute to the push for increased adoption, companies must accept the responsibility for enhancing security. Platforms interested in their own survival have no choice but to implement best practices for screening during user onboarding and transaction monitoring. The ability to identify suspicious new patterns—a process requiring inspection and intelligence layers comprised of both human and technological expertise—must be well-honed and virtually flawless.
Given the prevalence of these crypto-related concerns in the market and amongst users, the issues play a pivotal role in the product formation stages of the LYOPAY ecosystem and are also embedded within the business as standard procedure.