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Although digital assets are increasingly utilized across the financial ecosystem, merchant adoption remains stagnant when compared to consumer uptake. The primary issue is not a lack of technological advancement; it’s the significant gap in education and a disconnect between what digital asset brands are promoting and what merchants actually need.

Summary

• Merchants are hesitant to adopt crypto payments due to insufficient education, demos, and trust in new technology.
• Stablecoins provide viable solutions with faster settlements, lower fees, and volatility protection, especially for cross-border payments.
• Industry missteps, focusing on hype rather than real merchant issues, have hindered adoption.
• Building trust through education, government endorsement, and proven case studies is crucial for mass merchant adoption.

If we bridge this disconnect, the benefits are immense. New technology enables merchants to move money quickly, cost-effectively, and securely across borders, dramatically reducing settlement times. Businesses that adopt new technology gain a competitive edge, resulting in better cash flow, increased consumer loyalty, and improved supplier relationships. Why is there still a gap if the benefits are so clear?

The Disconnect between Hype and Reality

I believe the main reason for slow merchant adoption of digital assets is a lack of educational resources about these technological changes. One major hurdle is the absence of ‘show and tell’ education for traditional merchants. They need to grasp the practical benefits of a digital asset infrastructure, such as the speed and transparency offered by stablecoin settlements.

Conversations with merchants have often overemphasized technological shifts while neglecting the necessary mindset shifts for business owners. The intense competition among digital asset providers to secure clients has hindered adoption instead of helping it. This situation is similar to the initial adoption challenges faced with contactless payments, where education and trust-building were essential. Business owners are often resistant to change or anything seen as risky, particularly regarding finances and payments.

Merchants want solutions for real challenges: cost, integration, volatility, and customer demands. While many businesses are drawn to the lower transaction fees and faster settlements from crypto payments, concerns about volatility persist. Stablecoins address this problem by minimizing value fluctuations while preserving the blockchain’s advantages. The ability to rapidly receive and settle funds gives merchants a significant edge, especially in cross-border transactions where traditional methods incur high conversion fees and operate within limited time frames.

Unlocking Trust

To enable scalable crypto payments, trust must be established. Increased government promotion of stablecoins and the involvement of trusted spokespersons are vital for gaining traction with merchants. Authorities that advocate for consumer benefits, similar to the UK’s Competition and Markets Authority (CMA), have a significant role in promoting stablecoins as the future of money movement. However, an “old school mentality” persists, creating a disconnect between traditional banks and authorities.

While the road ahead may be complex, growth potential is significant. The main advantage for merchants adopting stablecoin payments is the speed of fund receipt and settlement. Even though political factors and currency value will influence crypto due to its dependence on fiat-backed coins, advancements in digital infrastructure over the next three years may encourage greater merchant adoption.

To bridge the trust gap, a concerted effort is required to move beyond the hype and emphasize practical, tangible benefits for merchants. By focusing on education and clear communication, we can unlock new growth opportunities for businesses and the broader digital asset ecosystem. This requires demonstrating the speed and cost-effectiveness of stablecoins while also showing how they can help eliminate chargebacks, access new global markets, and enhance cash flow.

I believe the future of payments is digital; however, new technology alone won’t lead merchants there. Trust must be established first. Only then can we expect to witness mass merchant adoption.

Read more: There’s no alt season — we’ve reached mainstream adoption | Opinion

Kreeson Thathiah is the Group CFO of XBD Group. He is an accomplished finance executive with 20 years in financial services, steering XBD’s financial strategy and global payments expansion, having previously worked at eToro as their UK CFO and Global Director of Payments.