StraitsX Insights

StraitsX Insights #7: Stablecoin use-cases in e-commerce & marketplaces

July 14, 2022

Key takeaways:

  • Payment inefficiencies plague e-commerce and marketplace industries
  • E-commerce stands to gain fast settlement times, consumer-facing fees, and automated FX conversion with stablecoins
  • Marketplaces stand to gain offline transaction capabilities with stablecoins

The e-commerce and marketplace industries have one problem that ties them together – receiving payments in a timely manner.

Payment inefficiencies saddle e-commerce & marketplaces

The merchant-facing payment experience within these industries are far from frictionless – merchants are frequently saddled with multiple lines of fees, and differing efficiencies of payment networks in different regions. This leads to inconsistent settlement times.

Stablecoin use-cases in e-commerce: fast settlement times, consumer-facing fees, and automated FX conversion

The global e-commerce market is expected to be valued US$5 trillion by the end of 2022. That valuation is supported by popular payment rails such as Automated Clearing House (ACH), Mastercard, VISA (and other major credit card providers), PayPal, and many others.

These payment rails are not the most efficient – transactions take at least two to three days to settle, and the fees charged are dependent on the type of transaction, service, or region used. For merchants with global ambitions, payments represent a massive headache to sort through.

Stablecoins can alleviate that headache for e-commerce merchants in three ways – by offering fast settlement times, a consumer-facing transaction fee, and automated conversion to the merchant’s preferred currency.

Stablecoin settlement times can vary – in the case of XSGD and XIDR, they take around 40 seconds or 6 minutes on the Ethereum and Zilliqa network respectively. Multi-chain support is essential to a stablecoin’s settlement time because it ensures availability if one network is down.

Network transaction fees are borne by the consumer when transacting with stablecoins. This means that merchants can afford to lower the list prices on their items. Fees might vary according to the network’s traffic load, but it is no different to adding a shipping fee on the consumer’s checkout page. Adding more multi-chain support would bring down transaction fees for the consumer, leading to increased spending.

The programmability of stablecoins would help merchants lower their costs because smart contracts can facilitate FX conversions. This allows merchants to receive payments in their local currency, whilst consumers can pay with theirs. This is in addition to the fast settlement times.

Stablecoin use-cases in marketplaces: offline transaction capabilities 

Marketplaces can take many forms in this day and age, but traditional brick-and-mortar stores are largely shut out of the advances in payment technology. However, stablecoins can facilitate the offline methods that these stores tend to operate on, increasing financial access to unbanked or underbanked individuals.

Offline transactions with stablecoins works like this: a consumer can load a stablecoin like XSGD or XIDR from their mobile wallet to their blockchain-enabled Visa card. When they pay, card-embedded software performs an off-chain signing between the card and the terminal. This transfers XSGD or XIDR to the merchant’s wallet. This payment is then verified on the blockchain later.

This way of payment leverages on smart contracts and blockchain technology to ensure privacy, traceability, and security, whilst maintaining payment efficiency for the merchant.

How do I tap on efficient payments for my business with stablecoins like XSGD & XIDR?

There are many benefits to using XSGD and XIDR stablecoins for payments. These benefits can be accessed via our Payment and Payout APIs. They can initiate payments, manage transactions, access the aforementioned APIs with a StraitsX Business Account.  

It is a simple process:

  1. Sign up for a StraitsX Business Account.  
  2. Verify your identity and upload the required documents.
  3. Get access to all features available to the StraitsX Personal Account, plus user multi-tenancy and transaction management.
  4. Start with the StraitsX API sandbox or get assistance from our Sales Team.
  5. Transfer Out your XSGD or XIDR to any one of our DeFi partners via a personal, non-custodial wallet:  DFX, Uniswap, and Zilswap.
  6. Pool your XSGD or XIDR on DFX, Uniswap, and Zilswap to swap and redeem between different stablecoins such as USDC, EURS, and others.
  7. Alternatively, you can pool your XSGD or XIDR on our partner DeFi protocol to reap attractive yields with low slippages.

Note: If you are a high net worth individual, or institution, you can take advantage of
StraitsX’s OTC Desk feature that offers deep liquidity and OTC block trades.

StraitsX and our DeFi partners are especially catered for our Indonesian and Singaporean users because of our native support of XSGD and XIDR. This would allow our regional investors to trade in their home currency, as opposed to factoring in the conversion of their home currency to the US Dollar (USD), minimising transaction fees, and slippages.

Ready to get started?

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