Encryption Asset Payment: The New Choice for E-commerce Giants

In recent years, encryption asset payments have gradually evolved from niche scenarios to being regarded as "the future payment method" in the eyes of the global retail industry. This trend is receiving positive responses and practices from mainstream e-commerce platforms.

Recently, a major e-commerce platform officially launched the USDC stablecoin payment feature, with the first batch of merchants starting testing on June 12, and a full rollout is expected within the year. At the same time, several retail giants are reportedly exploring the issuance of their own stablecoins, and even some travel and airline companies are beginning to study the possibility of encryption asset payments.

What is the driving force behind this wave? What pain points in traditional payments can stablecoins address? Should traditional financial institutions be worried about this? Let's delve into the core reasons why e-commerce platforms are embracing encryption assets and see if this is just a temporary trend or an inevitable choice for the future of payments.

The Payment Dilemma of E-commerce Platforms and the Advantages of Stablecoins

For a long time, payment fees have been a significant hidden cost for e-commerce platforms. Whether on major e-commerce platforms or in the global market, using credit cards or third-party payment tools incurs substantial fees each time.

Taking mainstream credit cards as an example, each transaction typically incurs a fee of 2-3%. This means that merchants have to pay an "invisible tax" for each item sold. Not to mention, cross-border orders also incur additional foreign exchange fees and settlement delays. Traditional payment methods have undoubtedly become a significant burden for the development of digital commerce.

In contrast, stablecoin payments offer several significant advantages:

• Real-time settlement: On-chain transactions can be completed instantly.
• Low transaction costs: No intermediaries fees
• Cross-border compatibility: avoids the complex foreign exchange conversion process
• Programmability: Able to seamlessly integrate with logistics and fulfillment systems

These advantages have led major e-commerce giants to seriously consider how to dominate the payment sector.

E-commerce platform takes the lead in testing USDC payments

Among many e-commerce platforms, a large platform took the lead in taking action. By partnering with a well-known cryptocurrency exchange, the platform launched a USDC payment feature based on the Ethereum Layer 2 network. Its operation is as follows:

• Customers complete payments on the chain using USDC.
• Merchants receive fiat currency (automatically converted to USD, etc.)
• The backend processing, conversion, and settlement are handled by professional institutions.

For customers, the payment experience remains largely unchanged; for merchants, there is no need to understand the complexities of encryption assets, as the entire process is automated. The key difference lies in lower fees and faster settlement speeds.

To attract users to adopt the new payment method, the platform even offers a 1% USDC cashback incentive. This "earning money while paying with stablecoins" model directly challenges the status of traditional payment channels.

This move also reflects the platform's deep insights into Web3 user behavior. Many stablecoin holders may not frequently use traditional payment methods, but they have considerable digital assets available for consumption. E-commerce platforms hope to convert them into active buyers through this approach.

Retail giants are following suit

As e-commerce platforms take the lead, it is even more symbolic that global retail giants are also starting to take encryption asset payments seriously. According to reports from several mainstream media:

• Several large retailers are exploring the issuance of their own stablecoins.
• Some travel and airline companies are also researching encryption asset payment solutions.

Why are these traditional giants suddenly "going all out"? The main reasons include:

• Lower transaction costs: Stablecoins can bypass traditional acquiring institutions, significantly reducing fees.
• Accelerated settlement: shortened from several days to a few seconds
• Improve customer retention: encryption asset users are more inclined to support merchants compatible with their wallets.
• Bypass traditional bank delays: No need to wait for bank transfers or credit approvals.

In short, stablecoins address several long-standing pain points that the e-commerce industry has been struggling to solve for years. This also explains why major companies are eager to get involved.

It is worth noting that the recent public criticism of stablecoins by global payment providers is no coincidence - they are indeed feeling the pressure from this emerging payment method.

The Actual Operating Model of Encryption Asset Payments

It should be clarified that actual payments with encryption assets are not completely decentralized. Taking the e-commerce platform mentioned earlier as an example, it adopts a "on-chain/off-chain hybrid" model:

• Users select USDC payment on the platform interface (transaction completed through the blockchain network)
• The platform receives payments, and professional institutions convert them into fiat currencies (such as USD, EUR, JPY)
• Fiat currency is delivered to merchants through traditional banking channels.

Therefore, although stablecoins bypass traditional credit card networks, the last mile still relies on the banking system. This is also a concern that regulators are closely monitoring: Do stablecoins evade compliance requirements? Is the clearing process transparent? How are anti-money laundering and know your customer measures implemented?

Fortunately, the e-commerce platform and its partners have made relevant preparations, and their implementation aligns with the current regulatory expectations in the United States regarding stablecoin compliance.

The Three Major Motivations of E-commerce Giants Betting on Stablecoins

By analyzing the core driving factors, we can summarize the following three points:

1. Cost Pressure

Merchants are generally dissatisfied with the high fees associated with credit card payments and third-party payment tools. Stablecoins provide them with a new option to bypass intermediaries, reduce costs, and accelerate cash flow.

2. Technical Upgrade Requirements

Traditional Web2 platforms are still subject to many restrictions of traditional banking systems. In contrast, Web3 payment infrastructure inherently possesses:

• Automation
• No Borders
• Transparent

The new generation payment protocol can be directly integrated into the order system, making it simpler and more efficient than traditional payment SDKs.

3. User Base Expansion

The user base of encryption assets is growing rapidly, and they "have coins but nowhere to spend them." Supporting encryption payments is an effective way to attract and retain this group. Additionally, it supports innovative reward mechanisms such as cash back, NFT benefits, gamified loyalty programs, and more.

Looking to the Future

Can stablecoins reshape the global e-commerce payment landscape? Let's take a look at some key indicators currently:

• Surge in payment volume: The monthly payment volume of stablecoins has increased from 2 billion USD two years ago to 6.3 billion USD, with a total global transaction volume exceeding 94 billion USD.
• The platform is taking proactive action: Several e-commerce and retail giants have already begun implementing or researching stablecoin payment solutions.
• Obvious trend: The acceptance of encryption assets is continuously rising, and the demand for efficient settlement in cross-border trade is becoming increasingly urgent, while traditional payment systems are becoming a bottleneck for development.

If Bitcoin is digital gold, then stablecoins are becoming digital dollars. E-commerce players who take the lead are laying the foundation for the global payment system of the next decade. With advancements in technology and improvements in regulation, we are likely to see the wider application and acceptance of encryption asset payments in the e-commerce sector.