Each day more than a million dollars is spent on goods and services using Bitcoin in the U.S., and up to 40% of these transactions are from new customers.
Even though approximately 15,174 businesses worldwide now accept Bitcoin as a form of payment and El Salvador became the first country to accept Bitcoin as legal tender, many retailers are yet to discover the revenue potential tied up in crypto.
Love it or hate it, crypto has a significant role to play in the future of payments and ignoring it won't make it go away. According to Statista, the total crypto market cap peaked at $3 trillion in 2021 and is still hovering at just under $1 trillion today.
By offering gift cards on crypto exchanges, brands can tap into the potential revenue tied up in crypto
In this article, we'll look at how gift cards can help bridge the gap between crypto and retailers - making it easier for people to live on crypto and for brands to capitalize on the revenue tied up within these digital currencies.
While crypto is undoubtedly becoming more widely accepted, it's still nowhere near as popular as fiat currency. With so few businesses taking crypto as a form of payment, it isn't easy to live entirely off crypto unless users cash out their coins into local fiat first.
📌 What is Fiat Currency?
Fiat is a currency that is declared legal tender by a government but has no intrinsic or fixed value and is not backed by any tangible asset. Most modern paper currencies, including the U.S. dollar, are fiat currencies.
Without a direct means of spending their crypto, customers wanting to pay for goods or services are forced to cash out using a service known as a crypto exchange. But transforming their crypto into fiat currency using an exchange isn't as easy as it may sound.
⏳ Crypto exchanges can take days to process withdrawal requests
📈 Fees for exchanging crypto for fiat can be very high
🚫 Some exchanges also cap the amount their users can withdraw in a single transaction
One solution to these problems is to spend Bitcoin, Litecoin, and other cryptocurrencies to buy gift cards, like those for Amazon, eBay, and ASOS.
By converting cryptocurrency into gift cards rather than fiat money, users can cut their transaction times from days to seconds, with their digital gift card code arriving in their email inbox almost instantly.
And it's not just the consumer who benefits from gift cards as a cash-out option. Crypto exchanges themselves can leverage gift card discounts to reduce transaction fees for their customers while also self-funding an attractive acquisition strategy that makes them a standout option in their crowded market.
Exchanges are constantly fighting to legitimize crypto and make it feel more familiar to the masses. Misinformation and fear of the unknown make the broader adoption of crypto as a payment solution challenging for consumers and businesses.
Gift cards can help to solve this issue as they feel safe and familiar, not only as a cash-out option but also as a loyalty incentive.
What's more, the ability for crypto exchanges to associate themselves with big-name brands by featuring a logo on their website can be compelling while also providing a degree of separation for those brands and businesses that don't want to be directly associated with crypto payments.
🛍 Gift cards offer users an easy means to live off crypto
📥 Cashing out cryptocurrency onto a gift card is an almost instantaneous process - no long processing times for the end user
📉 Users that cash out onto a gift card experience lower fees and get more for their money
👍 Gift cards feel safe and familiar, appealing to those who find crypto intimidating and bridging the gap between brands and the crypto sector
💸 Brands that offer their gift cards on crypto exchanges make themselves accessible to a previously untapped market
🔐 Those that offer their gift cards on an exchange never deal with cryptocurrency directly and don't need to worry about fluctuations in crypto exchange rates
🚀 Tillo makes the whole process easy and keeps all gift card transactions transparent
If you would like to learn more about what Tillo is doing to change the way gift cards are used in the crypto space, not only as a cash-out option but also as a profitable acquisition incentive, please contact us today.