How Does Crypto Stack Up Against Other Payment Methods in The Offline World?


Cryptocurrency might feel like it’s been around forever, but really it’s still a very young technology. Less than a decade old, it’s already firmly established as a concept and well-known around the world.

But, like all infant technologies, there remains a fair bit of uncertainty around crypto. It often seems like the industry is still working out exactly what it wants to be, which features and use cases it will develop and which ones it will leave behind.

One of the core features of cryptocurrency is, of course, its application as an actual currency, a means of payment for goods and services both online and offline. But we still seem to be a long way from this becoming a reality.

New ICOs and blockchain innovations spring up all the time, and yet it’s still relatively uncommon to find a shop in your local town or city which is prepared to accept payment in cryptocurrency.

Are these businesses missing out by not accepting crypto payments? To find out, we’ll need to dive into the advantages that cryptocurrency offers over traditional payment methods.

Crypto vs. the alternatives

When we compare cryptocurrency to the original payment method, cold hard cash, the differences are pretty stark. Cryptocurrency doesn’t have the same reassuring, tangible qualities as a dollar bill, but it brings convenience and versatility.

You don’t have to carry around a wad of cryptocurrency, and you don’t need to wait for change either. It’s also less susceptible to be stolen from you. But these advantages aren’t unique to crypto; they’re shared with pretty much all electronic payment methods.

So let’s move onto credit card and VISA payments. These are more established and widely used than crypto, but they still lose out in a number of areas. For one, credit card transaction fees can be higher for both buyers and sellers, and innovations in the crypto space are aiming to make this difference even bigger.

There’s also the issue of security — crypto is based in blockchain technology which is incredibly tough to corrupt or hack. It’s transparent so transactions can be easily followed, and chargebacks (a massive problem for small businesses) become a thing of the past as users can’t spend more crypto than they currently own.

Because crypto doesn’t rely on third parties, there’s a whole lot of unnecessary expense and bureaucracy cut out of the process. It’s more efficient and gives more freedom to the user. There’s also no need to share personal information when making payments.

This airtight security puts crypto above payment agents like PayPal and Stripe too when it comes to safety and peace of mind. It also offers a potentially much more affordable system.

So, after taking these advantages into account, why isn’t crypto being embraced by business owners and merchants everywhere? Well, there are two main reasons for this.

Why crypto still isn’t universally beloved

The first main reason why crypto isn’t commonplace in the offline world comes down to transaction times. Right now, these aren’t where they need to be. In fact, transactions can take upwards of an hour during busy periods, thanks to a range of factors.

This is enormously frustrating in an offline environment, as it can lead to customers waiting around for a long time while their payment processes. It’s annoying for buyers, and it’s just bad for business.

The second issue is volatility. Cryptocurrencies are popular targets for speculation because they can gain a lot of value in a short space of time. The unfortunate flipside is that they can also lose a lot of value in that time.

If a merchant accepts payment in crypto offline, they may not be able to exchange it for a long time. During that time, it could lose an awful lot of value. Again, not great for business.

So how do we solve these two big issues?

One company, T.OS, has its own innovative answer. Users can buy one of their coins, TOSC, at online exchanges. It’s built for quick transactions, but it’s as prone to price fluctuation as other cryptocurrencies.

So, to beat the volatility problem, users can exchange TOSC for another coin, TOSP, at special exchanges (there’s one in Singapore right now). TOSP is not volatile, it has a fixed price pegged to a local fiat currency. That means 1 TOSP in New York would be worth 1 USD, while in Toronto it would be worth 1 CAD.

By tackling the issues of volatility and long transaction times, it’ll be possible to encourage offline businesses to accept cryptocurrency and enjoy all the advantages it brings.