Technology | Cryptocurrency
CStore Decisions caught up with Perry Kramer, managing partner at Retail Consulting Partners (RCP), to learn more about the opportunity around cryptocurrency for convenience store retailers. “I give Sheetz credit for its foresight and innovative mentality in pursuing this payment technology,” Kramer said. “Even though cryptocurrency is still in the ‘try and learn’ phase of its life cycle, it’s important to note that alternate payment types have been in the growth phase in retail for the past several years.” He compared the slow adoption of cryptocurrency to that of Apple Pay, noting that Apple Pay had a similar adoption curve when it was first introduced to the market. The Flexa solution that Sheetz is using can act as a bridge between merchants and multiple cryptocurrency platforms and could offer a potential avenue for reducing interchange fees, he noted. “To settle the payments in real time using its own network will give merchants the ability to process payments in either cryptocurrency or traditional currency,” Kramer explained. “There are tens of millions of dollars in potential annual savings for these payment types to reduce the interchange fees that retailers pay in the store and eventually at the pump.” “This is similar to the early days of Apple Pay where the list of retailers that accept cryptocurrency is actually longer than most people know and includes, in some form, over a dozen major retailers including Lowe’s, Regal Cinemas, Whole Foods, Petco and others,” he added. RCP anticipates that we’ll see a trend toward retailers accepting cryptocurrency payments at the point of sale, as well as in-app transactions. “The trend is being driven on multiple fronts: The pandemic has significantly accelerated the use of contactless payments, millennials and Gen Z shoppers are looking to take advantage of cryptocurrencies 64
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and, in the future once merchants it, showing customers’ perception have matured the implementamay be rapidly changing. tion, we expect to see merchants experimenting with promotions and RETAILER CONSIDERATIONS membership benefits that encourage “The important things for convethe use of cryptocurrencies.” nience stores to know is that the As outlined in the graph above, a acceptance of cryptocurrency is still CivicScience survey found that from immature and will likely experience January 2021 to July 2021, the number some continued market volatility in of people who said they had had NOT the coming years,” Kramer noted. invested in the digital currency fell from “Currently, there are limited options 84% to 72%, while the number of who and competitors to the Flexa Netclaimed they had invested rose from work, and RCP expects to see other 9% to 17%, with those intending to payment networks offering similar invest rising from 7% to 10%. services in the near future.” CivicScience also noted that the It’s also important to understand majority of those who reported havthe different models that exist. “One ing invested or planning to invest of the least risky models is to take an in cryptocurrency skewed largely approach similar to Starbucks, where younger — between 18-34 — and Bitcoin is not accepted directly at the slightly more male than female. register, it is only used to load the As of the week of July 4, customer’s prepaid account that is CivicScience data showed that of then accessed at the register,” he said. those who reported that they had “In other words, you can add Bitcoin to not invested in cryptocurrency, the the Starbucks app and pay that way.” most frequent reason was “I don’t Kramer advised c-store retailers to understand it” (36%) followed by “I keep cryptocurrency on their radar. don’t think it’s legitimate” (20%). “Start budgeting time to stay close Those numbers have changed to this payment trend,” he said, “as since the week of May 9, when 34% the long-term potential to reduce reported “I don’t think it’s legitimate,” interchange rates may have significant and 26% said they didn’t understand potential in the future. “CSD
August 2021
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