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· 6 min read
Raghav Saraf

Cryptocurrency is being widely adopted currently. A growing number of decentralized applications are popping up every day. As cryptocurrency gets more adopted, more merchants are starting to accept it, but this number is still very low. To put it into context, Visa currently processes over 200 billion transactions. BitPay (Currently the world’s largest crypto payment processor) processes roughly 800,000. For context, for every 1 transaction BitPay processes, Visa processes over 250,000.

As you can see, this is pretty much negligible. Why? I’ll explain the reasons below.

The Problems

It’s not that cryptocurrency is not being used. The global trading volume of most of the biggest cryptocurrencies combined is over $200 billion per day.

This shows that crypto is being used, it’s just not being used for payments. Why? Here are the reasons:

First problem: the User Experience (UX) simply sucks.

Let’s say you have to make a recurring transaction(Like your netflix subscription) with fiat(USD and Credit Card):

  1. You select pay with Credit/Debit Card
  2. You either click autofill with your browser, which fills the credit card details or you press pay with apple/google pay and the transaction happens seamlessly. If you’re not in the US, you might need to complete 3D Verification (OTP or approve transaction) from your bank’s app, but it’s still pretty seamless.
  3. Now the transaction will happen seamlessly every month with no intervention from your part

Now, if you want to make a recurring transaction with crypto

  1. You select the currency you want to pay with
  2. If paying with metamask: You copy the address from the screen, copy the amount you need to pay, paste it in metamask
  3. Then you click confirm the transaction twice and then it’s sent.
  4. If some money is lost due to gas fees, your purchase is not confirmed and you need to make a new transaction to pay the remaining amount and confirm the purchase. It’s similar with a mobile wallet.
  5. Now every month, you have to open the website, check the invoice and repeat the whole process again.

As you can see, it’s a lot more painful that forgetting about the subscription and it happening automatically.

Second Problem: Churn(Number of customers who unsubscribe)

Because of the bad UX, the businesses who accept crypto payments for recurring transactions have a significantly higher churn rate(Number of people who unsubscribe) every month. This is because, every month the buyer needs to make the purchase decision again, they need to consider whether they absolutely need the project, and if they don’t absolutely need the product, they will unsubscribe.

This is not the case with credit card subscriptions. Most people will only cancel if there is a solid reason to cancel. Otherwise, they’ll just keep paying the subscription. This article outlines how 62% of automatically recurring subscriptions are unwanted. This puts a lot of money into the business’s bank.

Due to this, businesses do not want to accept crypto payments (As seen by the minuscule number of transactions that are processed by BitPay every year).

Third Problem: Cost of Transaction

Another problem is the cost of cryptocurrency transaction (Apart from gas fees). Most of the people who own cryptocurrency store their funds in a Centralized Exchange (CEX). It’s only the enthusiasts that store money in a different wallet or metamask. This means that there is often high withdrawal fees, so it costs more to buy with cryptocurrency.

Fourth Problem: Behavioral Misfit

Cryptocurrency is primarily used as an investment, so when someone get’s paid their salary in their bank account, they only transfer the amount they want to invest in crypto into the CEX. They transfer some money into their stock investment account, some into Coinbase. They don’t transfer extra funds, so they can’t make purchases because this isn’t their funding account, it’s their savings.

The Solution

There are two things that need to happen for cryptocurrency to be adopted widely.

First Step : better UX.

The existence of the current UX is for security. The users are in control of their money and no one except the user can make the transaction, unlike credit cards (Bank can authorize transaction automatically). Unfortunately, there needs to be a solution where people can delegate the transaction signing. Even though this is less secure, most people don’t care. Ease of use matters more than security to the wider audience. This is the same reason most people reuse their passwords on all the websites.

So we need a protocol that the users can delegate the transaction signing to. This will enable recurring transactions and then more businesses will start accepting cryptocurrency.

This is the protocol that we aim to build with LunarPay( We aim to build a secure foundation for recurring payments in the Web3 space. An ecosystem that any application can be part of.

Second Step : Corporations need to start using cryptocurrency.

Only when the corporations start using crypto, the employees will get paid in crypto and the general public will have crypto to spend. There are many services like Superfluid that are already starting to offer payroll services in crypto, but they manage a negligible amount compared to the potential of this.

This will happen inevitably because corporations are driven by profit, integrating blockchain in their ERP and finances is efficient because they no longer need to worry about the paper work and delays caused by banks. They can trade internationally seamlessly. This will happen once the government regulates crypto. Corporations won’t spend resources building blockchain infrastructure if the future is uncertain.

Once the government regulates crypto, corporates will start adopting blockchain and crypto payments will start to become a reality.

For a behavioral transition to happen successfully, the tech needs to make life easier, crypto does not do this right now. So only enthusiasts will adopt this. As soon as governments regulates it, there will be a lot more investment and adoption. Basically, it’ll blow up (Assuming the government does not ban it lmao).

That is all. Thank you for taking the time to read this.

If you’re interested in crypto payments, make sure to follow me on twitter for more content.