Real life payments have been the number one use-case of cryptocurrencies. Yet, a decade after Bitcoin’s genesis, it’s still a long way to mass adoption on both sides of the scenario, for the customers and merchants. With local teams around the world, Dash has established crypto payment networks in various markets, such as US, Venezuela, and Germany. In Thailand, Dash has been building and expanding its merchant ecosystem since October 2018. With around 100 transactions per month and average transaction volumes of around 0.2 Dash (around 30 USD per transaction), Thailand has since then become one of Dash’s most active ecosystems. Partnering with companies to help leverage crypto payments on all verticals such as food, entertainment or traveling, Dash is constantly growing that ecosystem further. Today, we want to share some important lessons on how everyone can help make the dream of crypto payments become a shared reality.
Thailand’s Proactive Approach on Cryptocurrency Regulations
Since 2018, Thailand’s government bodies have taken a proactive approach on regulating cryptocurrencies, making the country a popular hotspot for the Tech and Blockchain community. In June 2018, Thailand’s SEC officially recognized seven cryptocurrencies that ICOs can use to raise funds with. In August, the Bank of Thailand announced Project Inthanon, also called the central bank digital currency initiative. The goal is to explore the implications and the benefits of Distributed Ledger Technology to enhance the efficiency of the financial market infrastructure in Thailand. In January 2019, the Finance Ministry granted four licenses to crypto exchanges, crypto brokers, and dealers. In March, the SEC approved the country’s first ICO portal. Now, ICO projects that want to launch in Thailand must fulfill a strict screening, due diligence and KYC process.
Between all these developments, the crypto community has become aware of Thailand as an alternative to other crypto hotspots such as Singapore or Hong Kong. The Blockchain ecosystem, therefore, is constantly growing along with the number of events, meetups and companies. With projects like Muay Thai (Thai Kickboxing Coin) or an ICO by Adventure Hostel Bangkok, the first officially registered ICOs are about to launch.
Goals of crypto-payment adoption in Thailand
The Kingdom of Thailand is an amazing place with much to offer – friendly people, stunning beaches, and amazing food. On top of that, travelers get great value for their money. The number of tourists stepping foot into the country confirm that picture: almost 40 million tourists visited Thailand in 2018.
As cryptocurrency payments are still a newer form of finance, there is not much data to inform which market adoptions will succeed. Therefore, for Dash, testing adoption in various markets was the best approach. Looking at the statistics on crypto users, people between 18 and 34 have been most active, and we saw a constant growing number of crypto wallets to over 36 million by Q2/2019.
With the big tourist industry in mind, Thailand stands in the top five of the digital nomad list and ranks second in global crypto ownership cited in the Global Digital Report 2019. Dash’s goal is to motivate as many tourists and locals as possible to make crypto payments by giving them multiple options when it comes to spending cryptocurrencies.
For tourists, paying with non-Thai credit cards, exchanging currency, and withdrawing cash is expensive due to additional processing fees. Usually customers must accept the arbitrary currency conversion rates in addition to an $8 fee for every ATM withdrawal. Paying with Dash in contrast is almost feeless (less than 0,01USD), and the converting price charged is based on the average exchange rate.
Integrating Crypto Payments in Restaurants and Owner-Run Shops – Real Life Experiences
When Dash Thailand started in the second half of 2018, there were nearly no options to make purchases in Bangkok with cryptocurrencies. Only a handful of shops and restaurants accepted Bitcoin. We visited them all, but in the process of trying to pay for a meal in Bitcoin, it turned out that these merchants did not really accept any crypto payment. In fact, the staff in those shops did not even know what Bitcoin was. Speaking with the shop owners, our team found out that many of them started to accept Bitcoin during the market hype of 2017, but no one ever tried to pay with it.
Dash did not stop their inspection with those shops. In fact, we reached out to over 150 businesses within the first few months trying to convince them to accept Dash as a means of payment. The most common resistance we found was: when merchants heard the words bitcoin or cryptocurrencies, they either did not believe it was a real form of money or were afraid of its price volatility.
We adopted our method with this feedback in mind and created an end-to-end solution to offer a painless entry: instead of only offering a crypto-wallet, we told them that we would bring new customers, and provide free advertising opportunities on our social media channels. We explained that we would help them install a free QR based payment solution similar to LINE pay or Alipay which customers were already used to. Additionally, we offered them two options to choose from – either accept and keep Dash in their wallet or connect them to an exchange that instantly converted Dash payments to Thai Baht; most of the merchants chose the latter. With this newly adopted approach, we were suddenly able to on-board merchants.
A crucial lesson we learned from our research is that shop owners in Bangkok are usually risk averse, not willing to invest anything into a new payment solution and, most of all, they are sharply focused on generating money for their business. Our promise of driving new customers to their shops and offering free marketing channels turned out to be the most convincing argument for adoption. Of course, we had to prove that we could bring Dash customers to their business. We took on different strategies to achieve that goal. Our team members constantly reminded them to post on our social media channels, continually invited them to our meetups, and once, we even brought the whole meetup to one of our merchants. We published the location of those businesses on several maps, such as Anypay and Discover Dash to increase their reach.
From Small Shops to Bigger Players – Things to Consider
Taking a step further from small, owner-run businesses, we have found that there are many additional methods in which payments for goods and services are implemented, e.g. in POS systems, online plugins or at a vending machine. There are also big differences as to where people make payments – online or offline, at a multi-branch cooperation, on a third-party hotel booking platform, or in a restaurant.
No matter what sector, we found that most payment scenarios lacked native crypto integration, especially because these different scenarios were based on different business processes and technical requirements. Let’s look at some examples. Food trucks turned out to be low-hanging fruit for crypto payment systems. The owner of these trucks was usually present, with a smart phone or tablet available that could be quickly linked up to receive Dash. The process is straight forward – order food, pay immediately.
Compared to the food truck, implementing a crypto payment system in a restaurant is more complicated. Usually restaurants are using one of many POS systems that do not have a native crypto integration accessible by various staff members to receive customer payments. Enabling crypto payments is, therefore, a process that must be established parallel to the usual payment workflow. To make this happen, multiple staff members must be trained and, as most restaurants are owned by many shareholders, multiple decision makers must be convinced to accept crypto. From our sales experience, this increases the time required to on board a merchant, and decreases the chance of successful implementation.
When it comes to handling hotel bookings, the situation drastically turns. Hotels nowadays are highly integrated into a multitude of different software systems such as channels managers that coordinate availability of rooms between different booking platforms (e.g. online travel agencies). Simply put, if a guest books a room on a platform such as Expedia or Hotels.com, room availability is updated across multiple systems and the guest must accept one of the payments options offered by the service they choose to do their booking with. Even now, it’s a rarity for any booking platform to accept cryptocurrencies. This puts hotels in a difficult situation if a hotel owner decides to accept crypto payments. The problem is allowing the customer to pay in crypto, when the whole booking process is highly integrated. Those who try usually end up go through the manual process of blocking out rooms and creating separate invoices to email to their clients. A hotel owner, therefore, has quite a low incentive to accept crypto transactions.
We have learned that there is no one-size-fits-all solution for crypto payments. Instead, the road to adoption is filled with taking multiple factors into consideration, especially business processes, technical setups and various industry standards. Choosing interesting use cases and establishing best practices can be a successful method for those serious in working towards crypto payment adoption. On a grander scale, the industry is still in the pioneering phase, likewise with most other sectors do not accept cryptocurrency payments yet. For many reasons mentioned here, it is not an easy task to make crypto payments available – e.g. different regulatory frameworks, the needs of local business owners, price volatility or lack of crypto spending customers. At the same time, this situation offers them a range of new possibilities.
Payment processes are like a big puzzle where every piece must be put in the right place to create a full picture. Having a working payment solution (and in our case: blockchain based) is just one important part. To create a functioning system, business partnerships must be forged and should comply with local regulations. Without legal backing and local support, it is most likely that any payment solution will not be successful in the long run.
With Dash’s experience in mind, we highly recommend crypto advocates to constantly challenge and adopt their own methods to the fast-changing payment and blockchain market, while keeping focused on a quality user experience. Of course, nothing would work without all the motivated people who believe in crypto as a payment solution and can perceive its multiple benefits.
Dash is one of the top-cryptocurrencies recognized for its real-life payments. It gives you freedom to move your money in the way you want. Grab a coffee, split a check, or pay your phone bill. Dash moves money anywhere to anyone, instantly, for less than a cent.
Felix Mago – Co-Founder of Dash NEXT and Dash Thailand
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