Utrust: Why Should Online Businesses Accept Cryptocurrency? Exploring the Benefits to Buyers & Sellers (Sanja Kon, CEO)
Utrust: Why Should Online Businesses Accept Cryptocurrency? Exploring the Benefits to Buyers & Sellers (Sanja Kon, CEO)
Utrust is a payment integration which gives e-commerce businesses the power to accept digital currencies like Bitcoin, an increasingly popular payment method. Over this decade, it’s expected crypto payments will rise along with a new boom in e-commerce sales, so Utrust is definitely something retailers should consider. Sanja has held leadership roles at PayPal and eBay, and the insights she shared in this conversation really opened my eyes to the potential of cryptocurrency.
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Graham: So, welcome to this season’s focus on the fintech industry with Storesome, and today we’re joined by Utrust CEO, Sanja Kon. Sanja, welcome to the first ever Storesome podcast interview today – we are officially making history!
Sanja: Oh, wow! I didn’t know this was the first one. Thank you for having me on here.
Graham: So, the key topic we’re going to be discussing today is the benefits to buyers and sellers in using cryptocurrency on digital platforms — so, people who are currently using it, and what the future holds for them, and as over 50% of all online transactions now happen on marketplaces; how marketplaces themselves are embracing this digital currency change.
So, first off, I think it’d be great if our listeners could hear a bit more about Utrust and your background, as well as an overarching understanding of what Utrust does.
Sanja: Yeah, for sure. My name is Sanja, I’ve been the CEO of Utrust since January 2020, so a relatively short period of time still, but I’ve been with Utrust since late 2018.
Prior to Utrust, my career has been centred e-commerce and online payments. I spent more than a decade working for companies like eBay, Vodafone, and PayPal. It was really in 2018 when I was working for PayPal that I realized how complex the legacy payment system was.
As I started to investigate other alternatives in the market, I became really interested in Blockchain and I found Utrust, which, you know, among all the other companies was the most solid project.
Essentially, Utrust is a payment ecosystem, which allows merchants to start accepting cryptocurrencies from their customers, while at the same time continuing to settle the transaction in the regular “fiat” currency, for example, Euros, in their bank account.
That really allows for business as usual, because if you’re a merchant, you continue to be paid in your regular traditional currency, but you unlock a new revenue stream of all of these new customers who want to pay with cryptocurrency.
Our goal is to allow any merchants globally to accept digital currencies as a means of payment, and really bring cryptocurrencies to mainstream customers.
Graham: Understood. That’s perfect. Your wealth of knowledge and your background makes you perfect for this kind of interview with Storesome. I’m looking forward to hearing a bit more about how people are embracing cryptocurrencies. So, just to kind of give a brief background on myself and the Storesome business.
So, I’m Graham Broughton. I’ve been running Storesome for the past six, seven months now, but I’ve been trading and supporting large brands and retailers, on marketplaces for well over a decade. My roots are actually selling on marketplaces. I used to sell car parts on eBay, Amazon, and eventually built a telesales team and in a period of three or four years, we joined with the We Are Pentagon group to then start launching brands, which include Dyson, Next, and Sports Direct on both domestic and international marketplaces.
So, a very well-rounded understanding of the marketplace industry and the ecosystem, and how brands and retailers engage with that ecosystem.
So, delving straight into why cryptocurrencies are important. Sanja, what do you feel are the key benefits to marketplaces in kind of accepting cryptocurrencies as a payment method?
Sanja: Yeah, there are multiple benefits, but really the reason why we created Utrust was to find an alternative to solve all the problems associated with traditional payment methods, you know, being a wire transfer or a traditional payment gateway.
For marketplaces and online retailers in particular, the first benefit is really to drastically decrease the payment processing fees, especially for those marketplaces that have a lot of cross-border trade transactions. And as you know, better than me, marketplaces are global by nature, and today, using a traditional payment method, they will end up paying very high payment processing fees. Depending on the size of the marketplace of their volumes, the payment processing fees can skyrocket to 9% for each single transaction.
So, what our solution allows is a flat payment fee. It’s only 1% and that’s independent to the volume of international trade, which really allows marketplaces to save a lot of money.
Secondly, it enables borderless payments. This is really what we call a “borderless payment” independently of the country: your buyers are based elsewhere, but you still get paid, in the currency of your choice, quickly and really cost-effectively.
Third, it’s adding a new revenue stream to your business. What we see from 100% of our merchant portfolio is that by enabling a new payment with crypto, you gain access to a new segment of customers, and those customers are young and hard to reach. We’re talking millennials and Generation Z, who are really passionate about crypto.
These generations want to pay with cryptocurrencies and there are not many merchants and marketplaces to have enabled crypto as a payment method. Enabling cryptocurrencies and a new segment of customers offers you a new revenue stream immediately.
Lastly, I would say it’s about eliminating chargebacks from your business.
So, a chargeback is a return of the funds to the original buyer, and that can happen for multiple reasons. For example, someone stealing your credit or debit card. With Blockchain, that doesn’t happen, because it doesn’t rely on a credit and debit card infrastructure. Therefore, you eliminate any chargeback costs from your business. Today, chargebacks represent a $40 billion loss in the e-commerce industry, so that’s a very clear benefit.
Graham: Okay, thanks for that. That was amazing, the level of information you’ve just shared over those few minutes.
So, if I kind of bucket those into two or three different disciplines – the first one you’ve mentioned is saving money effectively. So, this sounds like a more efficient way for people to pay and be paid. But what it also means that you’ve got a flat rate in terms of how much you’ll be charged to make or receive that payment?
You mentioned up to 9% for traditional payment fees and dropping that down to 1% is a phenomenal kind of disruption in the market. As a result, are you seeing clients reduce their sales fees or are they just going to make more margin on what they are doing typically, given that kind of cost saving with payment processing fees?
Sanja: Yeah, there are multiple options for retailers and for marketplaces. So, what we observe, especially now during COVID is that some of our partners re-invested that money, into, you know, starting their business model or research and innovation. Other partners decreased the costs of the items that they’re selling. It’s really up to retailers to choose what to do, but it was really interesting to see that during COVID some of our partners really focus their efforts and put that additional budget into research.
Graham: And that leads me on to my next question, because you touched on that segmentation of customers. So, you’ve spoken about the benefits to sellers, and Gen Z and Gen X. What do you feel are the key benefits to buyers specifically, in paying with cryptocurrency?
Sanja: Yeah. So again, there are multiple benefits, but you know, if we really want to summarize, I think the first one is to have real ownership of your money. We call this like user autonomy and for the majority of people, this is the main benefit. Without going into the technical part, but you know, users owning crypto are able to control how they’re spending their money without dealing with an intermediary authority, like a bank or a government.
This is very useful for people and businesses who live in countries with a high inflation, for example, where crypto is already a more adopted alternative versus their traditional fiat currency, or where there is less trust in the government to maintain a healthy economy
But also, for people living in more stable economies like ours (United Kingdom), think about the fact that you always depend on a bank to manage your money. You can only withdraw certain limits, and you have trust in the bank to manage your funds. With cryptocurrency, you are the owner. You are the only person responsible for your own funds.
And then of course, there is the elimination of banking fees. Crypto users are not subject to any traditional banking fees associated with Fiat currencies.
So again, they’re able to save a lot of money, and benefit from very low transaction fees for international payments. Since crypto transactions have no intermediaries or government involvement, the cost of transacting is kept very, very low.
This is a major advantage not only to businesses, but individuals as well, who have a lot of international and cross-border payments. Lastly, any transfer with crypto like Bitcoin or other cryptocurrencies is very quick, so it eliminates the inconvenience of authorization times and very long waiting periods to transfer.
I would say the last point, which is close to my heart, is the accessibility. Today, more than 2 billion people are unbanked, meaning they don’t even have access to a debit or credit card, because of the complexity of our own banking system. Because users are able to send and receive crypto with only a smartphone device or computer, that makes crypto available to vast populations of users without access to a traditional banking system.
Graham: Excellent. We see that with different technologies. We’ve seen huge leapfrogs in technology in terms of China and Africa and India, where they’ve been able to purchase online and through marketplaces, with mobile technology. It’s enabling that mobile transaction.
Things are definitely changing, in terms of enabling marketplaces to be truly global. And on that note of change, given we’re in a pandemic at the moment, how have you observed marketplaces and retailers change how they would engage with cryptocurrencies?
Sanja: I think now is the perfect time, because there are huge opportunities for e-commerce and marketplaces to enter early when still there isn’t that much of a competition for the next generation of buyers we were talking about. So, companies that enter the space now will have the advantage to be among the early adopters and attract a new type of customer on their platform, and what we’re seeing is that more and more retailers are recognizing this.
There has been a huge acceleration on this during COVID. Cryptocurrencies are the future of online shopping; they are expected to show a growth rate of 35% within the next 5 years, so big names like Microsoft, Expedia, and others are choosing to accept cryptocurrencies on their platforms already. We’re now serving clients belonging to multiple verticals, from electronics, luxury, gaming, to travel, and so on, but just to mention a few.
On that note, what many of our partners see after adopting as is that the crypto community is so passionate about the segment that if they see a retailer accepting cryptocurrencies, they will promote that retailer freely without even being asked, so I think it’s clear that we’re going to see an acceleration on this trend.
Graham: I think that makes total sense and I think you’re completely right. I think at the moment, people are looking for the best technologies and the best processes to adopt, in order to become future proof. I read an article earlier this month around how the rapid adoption of technology given the COVID pandemic has been accelerated by 10 years in the last 6 months, and I think cryptocurrency will play a large part in that.
I think that’s a nice lead on to my next question: if cryptocurrency is the future payment method, what do the next three to five years look like for this sector?
Sanja: My expectation is cryptocurrencies will form a seamless shopping experience both for buyers and sellers. Choosing the right payment method is going to become more of a consideration for businesses and customers alike.
Today, we’re seeing that even people who are not accustomed to buying online before are now turning to online shopping, due to COVID. Businesses realise they need to have multiple payment options, and on the buyer’s side, more and more customers will want to pay with the payment method of their choice easily without complication.
Crypto allows for exactly that. More and more buyers and sellers will not want to live with chargebacks, to fraud, to having to pay high costs for traditional payment methods that are really from the 90s or early 2000s. This will lead to a massive adoption of cryptocurrencies over the next five years, as new players, and governments, enter this market.
Graham: So, let’s say I’m a marketplace, and I think crypto currency could be beneficial. You know, you just laid out some amazing points, reducing the cost of transaction, acquiring new revenue streams, accessing new segments of customers, eliminating fraud. This sounds amazing. What do I do next?
Sanja: I think one of the main fears from marketplaces when they approach us is that really, they don’t want to deal with cryptocurrency. It’s unknown. They don’t know how to treat the asset. The reassurance we offer is that, by partnering with us, they don’t need to.
They continue to get paid in their own currency of choice. In the backend, what happens is that we process the buyer’s payment in crypto and we immediately convert that into their currency of choice, such as Euros, and transfer it into the seller’s bank account. That way, they don’t even need to have knowledge about Blockchain or about crypto to accept it.
My advice right now is, don’t miss out because with low effort, and in under 10 minutes, you can open your business to a new set of buyers. Especially, during a moment of crisis, businesses should treat this as an opportunity to expand their business and customers.
Graham: Fantastic. That makes total sense. If our listeners wanted to get in touch with you or Utrust, what’s the best way for them to do that?
Sanja: Yeah, sure. They can either send me an email at email@example.com or they can go to our web page, which is utrust.com as well. You can follow us on social media too.
Graham: Before we wrap up, given your experience, can you offer a takeaway about crypto to leave some of the retailers or marketplaces listening to think about?
Sanja: I think in general, it’s all about staying ahead of the competition. It’s about leading and being the first. The advice I would give to any retailer or marketplace is to keep your eyes open and to continue to study this space, and not have the fear to add additional payment methods. If you think about 20 years ago, when PayPal was still at the inception, it was very weird for anyone to think about a future where, you know, you would pay with PayPal or with credit cards online. Technology moves fast.
It’s not about predicting these trends, it’s about shifting behaviour and not being afraid to try new technologies and experiment. I think that’s really important. Behaviours nowadays changing rapidly, and especially with COVID, we’re talking about permanent changes in the economy and in the industry. The e-commerce and digital payments are changing, so keep your eyes open and don’t be afraid to experiment with new technologies.
Graham: Thank you for those words of wisdom that’s really beneficial for our listeners. I’d like to echo that from a Storesome perspective, we observe the same, that shoppers have moved to that digital presence now, and as a retailer, or as brand, you really have to be bringing your A-game to compete online.
Thank you so much for joining us today, Sanja, we really appreciate your time and to learn from your experience and responses. It’s been really interesting for us. And if you’d like to hear any further from myself or Sanja, then please get in touch directly, or you can reach out to me, firstname.lastname@example.org or visit us at storesome.com.
Sanja’s Advice to Marketplaces Considering Accepting Cryptocurrency
“Don’t wait any longer. Without any investment, you can open your marketplace to a new audience and a new generation of consumers, with a borderless payment option and a truly global market with lower fees, fewer intermediaries and a blue ocean of opportunities.”
I hope you enjoyed this piece and many thanks to Sanja for contributing her insight.
If you’d like to learn more about Utrust, you can get in touch with Sanja at email@example.com.
If you’d like to learn more about the future of retail marketplaces and trends within the industry, we’d be glad to help you. Get in touch today and book your free 90-minute discovery session.