Cryptocurrency is a divisive topic. While some believe Bitcoin and other digital currencies are simply a fad, others tout digital currencies as the future of payments. And despite a recent dip in the market, cryptocurrencies don’t appear to be going anywhere anytime soon. In fact, the Reserve Bank of New Zealand (RBNZ) is considering launching a central bank digital currency (CBDC) to prepare for the possibility of digital dominance. Digital currencies, it seems, are something businesses need to start taking seriously.
Already, a number of New Zealand businesses accept payment in the form of cryptocurrency, including the Auckland City Hotel, Freshstore fruit deliveries, and the Hyperion Wines vineyard. Across the Tasman, Australian supermarket chain IGA allows customers to buy their groceries using Bitcoin (BTC), Litecoin (LTC), and Binance Coin (BNB), while Aussie service station chain, On The Run, now accepts cryptocurrency at 175 of its fuel and convenience stores. With the rise of digital payments being accepted across retail stores, should New Zealand’s supermarkets start preparing to accept crypto?
The next step in the frictionless payment journey
Whether online or in-store, customers seek the most frictionless payment experience possible. From tap-and-go payments to digital wallets like Google Pay and Apple Pay, right through to Buy Now, Pay Later options, anything that simplifies payments and improves checkout speed is crucial to minimising barriers to purchase. Being able to accept the widest variety of payment methods is just another way to help reduce those barriers.
As more Kiwis invest in cryptocurrencies, it’s only natural that they’ll start looking for places to spend them. Supermarkets, along with a host of other businesses, will eventually need to start accepting Bitcoin and other digital currencies once the demand for these payment options grows. We’ve already seen from previous research that rising inflation has resulted in decreased loyalty, with consumers shopping around and brand-switching in order to find the lowest prices. It’s not too much of a stretch to imagine similar behaviour would be replicated around payment options; that shoppers would go out of their way to find retailers who accept digital currencies once the demand for these options increases.
We’re not there yet
Recent Toluna research indicates that digital currencies aren’t something supermarkets need to worry about yet. In a global survey of 10,500 respondents across 19 markets, the study found that despite crypto being the second most well-known form of investment, it's still not yet well understood. As such, many still see crypto as too risky (46 percent), volatile (30 percent), and unsecure (27 percent) for investment. In fact, market-wise, there’s a stark difference between the attitudes to crypto in emerging markets, where attitudes toward crypto are quite positive and optimistic, compared with developed markets—which demonstrate higher levels of distrust.
However, despite the recent crypto market crashes, the majority (58 percent) of current investors were unfazed by the market dips. For those who are already crypto converts, the crash hasn’t reduced their interest in the overall market. In fact, amongst the current cohort of crypto investors, almost half (43 percent) plan to place more of their assets into crypto within the next six months—and this is true across both emerging and developed markets.
A recent Finder survey found that only nine percent of Kiwi adult internet users own cryptocurrency. Despite sitting below the global average of 15 percent, that figure is already up from seven percent in 2021. If the number of Kiwi investors continues to climb, supermarkets may well be forced to consider accepting crypto payments within the next five years or so.
Monitoring sentiment
Right now, supermarkets have their hands full dealing with the rising cost of goods and managing supply chain issues. Adding crypto payments to the mix is likely not an immediate priority. However, if the last couple of years has taught us anything, it’s that consumer sentiment can change at the drop of a hat. Major events can greatly influence consumer behaviour, affecting the way consumers feel, their affinity with brands, and ultimately impacting their purchase behaviour.
Although cryptocurrencies are nascent, the number of investors is growing steadily—and all it would take is a single event to cause the popularity of crypto to spike overnight. While no immediate action is required, it’s important that supermarkets stay aware of changing consumer sentiments and behaviours when it comes to digital currencies. At this point in time, it’s likely a matter of when, not if, digital currencies become mainstream.
Article by Sej Patel, Country Director, ANZ, Toluna
