The Rise of Cryptocurrency Payment Apps: Is Crypto Finally Replacing Fiat?

Cryptocurrencies are no longer speculative instruments that many once called them; they have transcended into digital money that enables everyday and cross-border payments. Over the last 10 years, there’s been a noticeable surge in cryptocurrency acceptance for everyday transactions. One thing that makes it possible to use crypto assets for everyday transactions are cryptocurrency payment apps. 

With crypto payment apps, you can spend Bitcoin, Ethereum, stablecoins, and even memecoins every day. It’s as simple as swiping debit cards. Payment apps, undoubtedly, have helped cryptocurrencies go mainstream. As crypto apps are ushering us into a new phase of digital finance, one can’t help but ask, ” Is crypto set to replace fiat for good?” Let’s see if the rapid evolution of crypto payment apps can leave Fiat behind.

The Evolution of Cryptocurrency Use Cases

Crypto adoption globally has been remarkable. Statistics reveal crypto users have grown 190% between 2018 and 2020, signalling massive acceptance. Beyond retail acceptance, institutional investors are also including crypto in their portfolios. The likes of Strategy (formerly MicroStrategy) and Twenty One Capital have established Bitcoin reserves. Beyond institutions, countries like El Salvador have made a bold move by accepting Bitcoin as legal tender. 

But it hasn’t always been like this. Crypto was seen as an investment in its early years. Early adopters bought Bitcoin to hold long-term, hoping to cash in when prices soar. However, advancements in infrastructure and awareness have changed people’s perspective. Today, small businesses, merchants, and major retailers are accepting crypto payments. Companies are establishing crypto ATMs to facilitate crypto transactions. Of course, crypto payment apps have risen dramatically to ease payments. BitPay, CoinGate, Coinbase, Crypto.com, Ivorypay, and even traditional payment gateways like PayPal now allow payments for groceries, gadgets, and clothes, using digital assets. 

As of 2024, the crypto payment app market was valued at $910 million in 2021 and is projected to hit $1.9 billion by 2028. This statistic underscores the growing adoption of digital currencies as a legitimate payment source. Institutional interest and the introduction of crypto-friendly regulations are changing people’s perspective of cryptocurrencies and have kick-started a dramatic shift towards a borderless, digital economy. The rapid rise of crypto payment platforms is a testament to this dynamic shift. Fintech companies, such as Ivorypay, are creating seamless methods to ease payment, leveraging the rising smartphone penetration and accessibility of internet connectivity.

Factors Driving the Adoption of Crypto Payment Apps

Here are the key drivers for crypto payment apps.

• Limited Access to Banking

Cryptocurrency apps are essential to today’s global economy. They offer decentralized alternatives to traditional banking, particularly in areas with underserved populations. This is one of the driving factors for crypto payment apps. Consumers in this area are severely underbanked, and would need a way to pay for goods and services. This is where crypto payment apps come in. Their integration can help users facilitate transactions even with limited access to traditional banking.

• Cross-border Payments

Another factor driving adoption is cross-border payments. Traditional cross-border payments are slow and costly because they involve intermediaries. However, crypto payment apps allow for quicker and cheaper international transactions, making them a preferred choice for global businesses, migrant workers, and freelancers. Additionally, the rise and issuance of stablecoins are making cross-border payments attractive. Stablecoins offer the stability that traditional businesses love, making them ideal for everyday transactions. Several crypto payment apps offer stablecoin payment to control volatility.

• Inflation

Inflation is also driving crypto payment adoption. Countries like Argentina, Venezuela, and Turkey have depreciating fiat currencies. Crypto offers an alternate route to a more stable store of value. As a result, Fintech companies and payment gateways are leveraging the situation to create crypto payment apps for transactions.

• Ecommerce

The growth of online shopping is another driver for crypto payment apps. Online shoppers are mostly millennials and Gen Z, who are more likely to own digital currencies. Therefore, it’s not surprising to see them prefer crypto payments. Besides, crypto payment apps are secure and offer lower transaction fees. Some of them offer cashbacks and rewards, which aligns with many customers. 

These days, some apps directly convert crypto to fiat before they are sent. For instance, Ivorypay’s Duffle, a consumer-focused crypto payment app, automatically converts your crypto into local currency before they are sent out. Merchants don’t need to understand crypto or have any special knowledge before they can trade. That’s ultra convenient for uneducated merchants. 

Due to the rise of crypto payments, e-commerce websites are integrating APIs for borderless transactions, saving high transaction fees and enhancing operational efficiency. 

Challenges to Crypto Payments Adoption

Despite the benefits and potential of crypto payment apps, they aren’t without some risks. The inherent price fluctuation of some cryptocurrencies is a source of worry to both merchants and consumers. Stablecoins may have solved that issue because their values are pegged to traditional currencies. However, the issue of regularity still lingers. 

Crypto regulations differ from one jurisdiction to the next, creating uncertainties for the payment providers and merchants/consumers. The inconsistency can hinder adoption and make it difficult for businesses to comply. Regional governments and bodies must come up with a homogeneous regulatory framework to solve this fragmented structure. 

Another challenge is limited consumer awareness. Only a small proportion of the global population is familiar with cryptocurrency payments. This causes a delay in crypto adoption. A financial literacy program must be instituted to bridge the knowledge gap and onboard future users. Educational materials, seminars, and training initiatives can explain the technical jargon and equip consumers and businesses with the knowledge to scale.

Can Crypto Replace Fiat?

The idea that crypto can replace fiat is still incubating, despite its benefits. For instance, crypto payments are instant. The speed of transactions for international or cross-border payments is near instantaneous. Traditional payments, on the other hand, take days before they reach finality. 

Also, crypto payments offer minimal fees compared to traditional payments. Furthermore, crypto payments can serve the underbanked and unbanked individuals – those with limited access to traditional payments. Finally, crypto payments are pseudonymous. 

However, replacing Fiat completely is quite far-fetched. Crypto wasn’t developed to eliminate fiat – it was created to complement and redefine the way we use money. Therefore, you don’t need to ditch your dollar or euro completely, but you may use crypto payment cards and apps more. The future of money is digital, and crypto payment apps ensure we get there quicker. 

Final Say

Cryptocurrency payment apps are here to stay. They are redefining how we spend crypto in a digital financial landscape. As more businesses embrace crypto payments, we expect more crypto payment apps like Duffle to emerge and co-exist with traditional payments. The future is decentralization!