Rappi's decision to accept cryptocurrency as payment is yet another step towards the mass adoption of cryptocurrency.
Not long after Strike announced its partnership with Shopify, another company is taking a step to incorporate crypto as payment for its services. This time it's Rappi, a Colombia-based delivery startup operating in many Latin American countries.
Rappi started as a delivery app, and now it's also branching into financial services in some of the countries where it operates. They describe themselves as a Doordarsh meets Delivery meets Instacart. The company was growing steadily, surfing the wave of the ever-growing digital economy and e-commerce push, but the COVID-19 pandemic really kicked things into overdrive.
With the fastest delivery times in countries such as Brazil, Rappi managed to grab its share of a very competitive market, and that did not go unnoticed by some of the major VCs out there. They are backed by some industry giants such as Sequoia, DST, Andreessen Horrowitz and YCombinator.
One of the most recent strategies of the startup to try and differentiate itself from its competitors is the incorporation of cryptocurrency as a payment method for its delivery services. Rappi has partnered up with US-based BitPay and Mexico-based Bitso and launched a pilot project in Mexico.
According to what was unveiled by the company, users will be able to spend cryptocurrency to buy "Rappi Credits" directly from the app. These credits can then be used to pay for the delivery services offered by the platform. It's not clear yet whether multiple tokens will be accepted or Bitcoin only. Most articles on the subject use the generic term "cryptocurrency," but that word is often used to refer to Bitcoin.
What does it mean for crypto?
It all depends on how we look at it. Is it likely that people will suddenly start using crypto to pay for the delivery services on the app? No, I don't believe that is the case. Crypto payments are still a very niche thing.
BitPay, for example, currently processes around 70,000 crypto payments per month on average, which is nothing compared to VISA, which processes over 200 Billion credit-card transactions in a year. Not to mention that a considerable share of crypto payments are made for buying luxury goods such as expensive jewelry, cars and even boats.
That being said, I still think this is good news for crypto adoption. Great news, even. The crypto revenue or the number of transactions that will result from this decision don't really matter. It's about the message being sent.
Whenever a company decides to accept cryptocurrency as payment, it helps legitimate it before the general public. Slowly but steadily, people realize that if all these major companies are willing to be paid inc crypto, crypto is probably not "terrorist money", as mainstream media wants us to believe.
Those who are more involved in the crypto universe already know about the numerous advantages of cryptocurrency, such as fast, safe and cheap transactions but people, in general, are still one stage behind in the adoption curve. They are still suspicious of crypto, so before they can even think about learning the technicalities, they must first know that they can trust it. I believe having crypto associated with big brands and companies is a great way to do so.
Final thoughts
Having more companies accepting cryptocurrency as payment is very important for its adoption because it helps build trust among people. It's not likely that we will see an explosion in crypto payments happening so soon, but that doesn't matter all that much. In the end, it's all about the message.