Despite not being mainstream payment solutions yet, cryptocurrency-based payments (also known as Web3 payments) already bring benefits such as lower transaction fees, Robert Miller, the vice president of growth at Fuse, a layer 1, EVM-compatible blockchain for launching dapps, has asserted. For merchants, Web3 payments come with the added benefit of what Miller called protection from “fraudulent chargebacks.”
Crypto Payments Trump Traditional Payment Methods
To back his assertions, Miller claimed many of the merchants that are presently experimenting with or encouraging their customers to use Web3 payments are doing so because they are seeking a better deal than what they are getting from traditional payment providers.
Miller, however, conceded that Web3 payments are still at their infancy stages and as such they come with certain limitations which hinder their adoption. In his written responses to questions from Bitcoin.com News, Miller also highlighted the security challenges that users of Web3 payment methods must expect. In addition, the Fuse senior executive also reiterated the argument that self custody of private keys is the most ideal and safe method of storing one’s digital assets.
Bitcoin.com News (BCN): What are Web3 payments and why should online merchants care about Web3 payments at all?
Robert Miller (RM): Web3 payments refer to payments made using cryptocurrencies and blockchain technology. Online merchants should care about Web3 payments because they offer several benefits over traditional payment methods.
Firstly, cryptocurrency payments are faster and more secure due to the immutable nature of blockchain technology. Secondly, they have lower transaction fees, which can significantly increase a merchant’s profit margins. Thirdly, they allow for global reach and expand the customer base beyond geographic locations. Fourthly, accepting cryptocurrency payments can increase customer loyalty, as cryptocurrency enthusiasts prefer to support merchants who accept their preferred form of payment. Finally, in a world where money is being reinvented, accepting Web3 payments can enhance a merchant’s brand image as an innovative business that values cutting-edge technology and customer privacy.
Using a Web3 payments solution, we’re cutting off the middleman to our transactions – the banks, the payment processors, and the brokers. Web3 payments are entirely peer-to-peer and are built on trustless logical systems, meaning no one has to rely on a third party to facilitate the transaction. More vitally, businesses and online merchants allow instantaneous, borderless transactions with low fees depending on the amount sent or received.
BCN: Can you explain why an online buyer should opt for crypto payments over say Visa, Stripe or other traditional payment methods that are supported by merchants?
RM: Buyers should do whatever is most beneficial to them as a consumer at the time. If the offer is the same as yours and you prefer to use Visa, then you should use Visa. The merchant, in this case, will pay 3.5% on the transaction. Consider a business doing $1M/year in revenue – this is a potential $35,000 in Visa transactions fees alone, which is an insane amount of money.
This is why merchants are increasingly opting to experiment with Web3 payments, often offering discounts or loyalty programs through NFTs or tokens to encourage consumers to use the payment option that helps them save money and enhance the user experience.
BCN: The Bitcoin network has of late seen the number of unconfirmed transactions climb to over 200,000, something that has pushed the average network fee to nearly $20. Some have said such high fees render moot the argument supporting the use of crypto as a means of payment. Do you agree with this assertion?
RM: The high fees and long confirmation times of Bitcoin transactions have been a source of criticism for the cryptocurrency. However, it’s important to note that Bitcoin was not designed primarily as a payment system, but rather as a decentralized store of value.
While it’s true that the high fees and slow transaction times may make Bitcoin less attractive for small and everyday transactions, there are still many use cases where it can be valuable. Additionally, there are other cryptocurrencies and blockchain networks that are specifically designed for fast and low-cost transactions, such as Fuse, Polygon and Binance Smart Chain. These networks are more suitable for payment use cases.
BCN: Your blockchain project Fuse is said to be aiming to enable seamless and affordable crypto payments in daily life. From your standpoint, what do you think are the benefits of accelerating the mainstream adoption of Web3?
RM: When big companies like Starbucks, Nike, Adidas, and Mcdonald’s announce plans to experiment with Web3 payments, they typically throw down a multi-million dollar POC (proof of concept) budget and assign a dedicated team to run the project without it necessarily impacting other parts of the business in a big way. SMBs and startups cannot do this. So how do they ensure they participate in the paradigm shift of money?
Fuse provides simple-to-deploy, end-to-end integrated products, including a wallet SDK, ready-to-use APIs, and mobile wallet tools and infrastructure to level out the planning field and ensure that businesses that are the backbone of the economy can play a role.
BCN: What advantages do Web3 native solutions such as yours have over those offered by giants like Visa, Paypal, and Stripe?
RM: The future of digital payments lies in Web3 payment services. They offer a range of benefits over legacy payment systems, including reduced transaction fees, faster settlement times, increased security, borderless payments, and greater transparency and privacy. As Web3 payments continue to gain traction and become more widely adopted, they have the potential to transform the way we conduct transactions, making them more efficient, secure, and accessible.
Compared to traditional point-of-sale (POS) systems, accepting crypto payments offers several benefits, including lower transaction fees, merchant protection from fraudulent chargebacks, increased sales potential, and increased customer convenience. Additionally, there is a level of anonymity with crypto payments that some merchants and customers may find appealing.
The Fuse ecosystem includes 100 integration partners and has been built over three years to provide vital services and infrastructure designed to create a robust platform for mainstream crypto and Web3 payments adoption.
BCN: Your startup is said to have recently launched a $10 million Ignite Funding Program. What is the purpose of this fund and who are the intended beneficiaries?
RM: As part of our ongoing mission to bring Web3 payments to mainstream business adoption, we are dedicated to supporting both real-world and defi projects. The Ignite program comprises two main funding areas. The first is an on-chain defi incentives fund of $10 million, designed to improve the general financial health of the fuse ecosystem. The second is to support early-stage real-world builders on Fuse. The strong on-chain economic activity supports innovation aligned with our north star of achieving mainstream crypto adoption with payments. Innovation, in turn, supports strong economic growth and activity, creating a fly-wheel effect.
BCN: Just like any technology that is still in its infancy stages, Web3 payment platforms are susceptible to security threats and high costs. What is your word of advice for those using Web3 payment solutions for the first time?
RM: Web3 payments are still in their early stages and have certain limitations that must be considered before using them. Web3 payments may be prone to security threats and high transaction costs as several networks are yet to deal with these issues successfully. Luckily, Fuse does not have these issues and can process transactions in under 5 seconds for a cost of less than a cent.
Furthermore, acceptance by merchants is still a challenge, and there is a lack of understanding of the importance and impact of blockchain-related concepts. Scams and fraudulent activities occur everywhere, and staying safe and vigilant is essential while dealing with Web3 payment solutions. Never share private keys, double-check wallet addresses and networks before sending any crypto, and look out for scams or fake sales on social media.
Additionally, centralized exchanges may disappear and take your crypto with them, so owning your keys and using non-custodial wallets is vital. Finally, taxation is essential, and everyone dealing with Web3 payments must know how it is taxed in their region.
What are your thoughts on this interview? Let us know what you think in the comments section below.