Living in the Post-Wallet Economy: Cryptocurrency vs Mobile Payments

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Small businesses and entrepreneurs are often made up of those striking out on their own to take up a new idea, improve on an existing one, or supply a need for a market. How customers pay for products and services is changing rapidly. Nowadays we don’t pay with cash, or even credit cards—we are starting to roll both into the smartphone. There are two methods to pay for products and services via smartphone: cryptocurrency and mobile payments, so a small business or entrepreneur can and should adopt these payment methods in order to reach all potential markets.

Started From The Bottom

Cryptocurrency has come a long way since Bitcoin’s debut in 2009. As the world’s most popular digital currency, Bitcoin has attracted attention (both positive and negative) for its open source nature and flexibility. Users can transfer bitcoins between each other without the intervention of a bank or central monetary authority. Although this may be risky for small businesses and entrepreneurs due to a lack of regulation, a growing number of businesses and entrepreneurs were willing to adopt bitcoins as a form of payment during Bitcoin Black Friday in 2013.

Bitcoins are most popular in Latin America, where banking and monetary systems are prone to failure. This gives bitcoins the fluidity to survive in an uncertain monetary environment. However, the rest of the world has yet to catch on—although there are 13 million bitcoins in circulation, 64% of bitcoins still sit in inactive accounts. This is a risk that small businesses and entrepreneurs should be willing to take because the bitcoin market is still widely untapped.

There’s An App For That

Mobile payment is another way to pay for products and services on the go. For ease of use, your small business should have an app—if you have IT expertise, you can easily create one, or contract a third party to do so on your behalf. You can also make use of an online store in conjunction with these productivity apps so that you can keep costs low as you expand your business. If you already have a website, make sure it is mobile-friendly and/or can scale down to mobile devices so you can make conversions more easily.

For a small business, you want to keep your overhead as low as possible as you continue to market your products and services on the Internet via social media and other digital avenues. You also should make the three major mobile payment options available—Google Wallet, Apple Pay and Amazon Payments. If you issue coupons or loyalty cards, you also want to transfer them to be redeemable there as well.

One of the major markets for mobile payments is one you should consider expanding to in the near future. Africa not only has the highest usage of mobile payments—it is also the fastest-growing smartphone market in the world, outpacing Asia and North America in growth. One of the major markets on the African continent, Kenya, has had success with its M-PESA mobile payments app in partnership with their largest mobile provider, Safari Telecom. This has encouraged entrepreneurship in the country on a wide scale due to the impracticality of going to a brick and mortar financial institution, and has helped improve the lives of Kenyan citizens. Other African countries are looking to imitate Kenya’s success, and M-PESA is looking to expand into other African markets and into Asian markets that have large rural populations that cannot easily access a physical bank location.

What’s Next?

Like all things, both have pros and cons—cryptocurrency lacks a regulatory authority, but it is fluid in markets with unstable financial systems and is beginning to be accepted as an alternative form of payment. Mobile payments have had security issues in the past, but are generally more trustworthy than cryptocurrencies and have established themselves in many major markets around the world. A small business or entrepreneur should consider both options as they offer new products and services and/or expand their business into new markets, especially emerging markets such as Latin America and Africa, where the middle class has tripled between 1981 and 2011. Combined with the right marketing techniques, any small business or entrepreneur can benefit greatly by offering these avenues as payment options.


[About the author: Dave Landry jr. is a financial consultant and small business adviser based in Southern California. He hopes you enjoy the article and encourages you to check out all of the great resources on Ecopreneurist. You can find him on Google+.]


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