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Should Utilities Accept Cryptocurrency as Payment?

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Karen Marcus's picture
Freelance Energy and Technology Researcher and Writer Final Draft Communications, LLC

In addition to serving as an Energy Central Community Manager, Karen Marcus has 25 years of experience as a content developer within the energy and technology industries. She has worked with...

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According to a recent Inc. article, consumer adoption of cryptocurrency is on the rise. The article mentioned survey results that show 48% of U.S. consumers reported investing in cryptocurrency during the first half of 2021 and that 21% have used cryptocurrency to send or receive money, make purchases, or accept payment. Given this increase in popularity, more companies are accepting or considering accepting cryptocurrency in exchange for products and services.

Benefits include faster transaction speeds, lower payment fees, and higher customer satisfaction. But what do these factors mean for utilities specifically? The following sections explore these considerations and how they might influence utility leaders’ thinking about this issue.

Reputation

Utilities are historically change-averse, yet some are challenging that notion with advanced technology that enables them to provide better service, perform faster restoration following outages, and engage customers in energy efficiency, power production, and grid enhancement, along with digital customer care and payment processing options. Adding the acceptance of cryptocurrency as payment is one more step along the path toward being seen as an innovative, technology-forward operation.

Payment Issues

Due to the nature of cryptocurrency, transactions are final, with no chance of reversals, unlike, say, a check that bounces. Additionally, cryptocurrency transactions can be completed at many times the speed of other forms of payment, including credit cards. Therefore, accepting cryptocurrency as payment has the advantage of lowering a utility’s days sales outstanding (DSO) rate, as well as significantly reducing the cost of payment processing.

Value Fluctuation

Readers might be aware that the value of cryptocurrency has risen and fallen dramatically over the past few years. This fluctuation impacts the ability to determine the value of products and services purchased and makes returns complicated. Some companies have resolved this issue by offering a dollar value in the event of a return. But, given that customers of power don’t request refunds, cryptocurrency is actually a better fit for companies like utilities than for sellers of physical products.

Williston – A Case Study

Williston, North Dakota recently became the third municipality in the U.S. to accept cryptocurrency as a form of payment for utility services. Advantages for the city include security, convenience, and cost savings. A spokesperson said that Williston strives to be a leader and position itself at the forefront of emerging technology, and further stated that the payment system immediately converts the price to fiat currency, protecting customers and the city from volatility.

The use of cryptocurrency to pay for anything represents a paradigm shift in how we think about money. Other forms of payment, including credit cards, PayPal, and Google Pay were entirely new at one time, but as people grew accustomed to them, they began to seem normal. Similarly, cryptocurrency will become mainstream when enough companies accept it as a payment option and enough people take advantage of it.

So, should utilities accept cryptocurrency as payment? While now may not be the time for utilities to do so, given its growing popularity company leaders should at least start thinking about how to implement this ability at some point down the road.

Does your utility accept cryptocurrency as payment? If so, what have been the primary benefits? Please share in the comments.

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