Should You Accept Cryptocurrency In Your Business?
If you run a business, then there is a high chance that you have probably heard about cryptocurrency. Today, merchants use this form of virtual currency to conduct transactions. It is a digital currency that contains some unique features that you can use in your business. Consumers also look for various ways to utilize cryptocurrency to purchase goods and services.
Though experts believe that this is the currency for the future, its use is surrounded by controversy. As you run your business, you must consider the option of accepting cryptocurrency as one of your payment options. You, however, have to put into consideration your business needs for you to determine if this is the right move to take. Though cryptocurrency has a lot of benefits, it is not ideal for all businesses. We will help you decide if cryptocurrency is for you by discussing its benefits against its disadvantages. Find out more!
Recommended Read: How to accept crypto payments in your business.
How does cryptocurrency help businesses?
Before you start accepting this method of payment in your business, you need to learn how it works as well as how it can benefit you. A cryptocurrency is a digital currency that depends on encryption technology for the transfer of funds through the internet. It does not follow conventional banking business structures but instead works independently. This means that digital currency eliminates any third party.
Cryptocurrency is among the latest technology that many countries have adopted. Business owners believe that embracing this technology can help them stand out from their competitors. Most merchants, therefore, accept bitcoin as a popular form of cryptocurrency due to the following reasons.
- It is affordable
Since cryptocurrency is decentralized, the bank does not need to verify each transaction made. This prevents your business from incurring a lot of bank fees. Accepting cryptocurrency can, therefore, save your business up to 5% on every transaction. When you don’t share your business revenue with such financial institutions, you end up saving more and using your money more resourcefully. You should, however, note that merchant wallets come with a flat fee that you have to pay for you to use cryptocurrency.
- Quick processing of transactions
Today, many people like instant gratification. When you are running a business, you can avoid the frustrations of waiting for money to be available in your account by accepting cryptocurrency. This currency facilitates instant transactions making this easier for business owners. When you use conventional payment methods, you have to deal with delays from time to time since banks tend to slow down payment processes.
- It is an international currency
If you handle cross border transactions, then embracing cryptocurrency would be a wise move for your business. This allows you to conduct transactions with ease in different parts of the world without the presence of a middleman. By accepting cryptocurrency, you make it easy for customers around the globe to buy goods and services from your online store more conveniently. Research reveals that compared to check payments and wire transfers, cryptocurrency offers a frictionless process of making payments within a few minutes. You also get to avoid costly exchange rates and foreign transaction fees.
- Cryptocurrency prevents you from chargebacks and fraud
Just like cash, in this digital currency, you either have the money or not. Cryptocurrency transactions are also final since they are added to a blockchain through mining. Since the system has to verify the funds, you cannot spend more money than you own. When you accept cryptocurrency as one of your payment options, both you and the customer have to approve the transaction. It, therefore, minimizes any chargebacks and disputes that arise from using other forms of payment.
- You may gain new customers
Every day, more people appreciate the usefulness of cryptocurrency. As customers continue embracing this currency, you can attract more customers by accepting it as one of the methods of payment in your store. A study shows that merchants that accept cryptocurrencies such as bitcoin have a broader customer base compared to those that do not. Apart from accepting it in your business a payment form, you can even broaden your knowledge on how to make money with crypto and end up gaining more.
Drawbacks of accepting cryptocurrency
Despite numerous benefits, cryptocurrency comes with some significant drawbacks that you have to consider before embracing it in your business. Some of them include the following.
Some merchants are hesitant about accepting cryptocurrencies in their businesses due to their volatility. Most of the cryptocurrencies have a one-month volatility of about 60%. The fluctuating nature of this digital currency poses a significant challenge to some businesses.
Using cryptocurrency can also be risky since crypto-exchanges are not very secure. Statistics reveal that billions of dollars are lost every year due to hacking. The problem with crypto exchanges is that it does not cover losses as traditional banks do. Some businesses, therefore, end up losing their earnings from cryptocurrency.
Also, when you accept cryptocurrency in your business, you have to store your crypto funds in a digital wallet. The keys to such a wallet can be stolen or misplaced, making it impossible for one to recover their funds. Since cryptocurrency promotes anonymity, it can lead to illegal transactions.
- Learning Curve
Unlike traditional currency, cryptocurrencies have a learning curve. You have to learn how the blockchain technology works and how to make use of digital wallets. Some people find this technology a bit confusing and hard to master. The regulations surrounding cryptocurrency are also complicated for many. Merchants have to get familiar with new tax rules beforehand. You also have to learn the process of accepting cryptocurrency payments.
Recommended Read: List of 17 cryptocurrency payment gateways to accept crypto payments
Conclusion: Making the right move
Now that you understand what cryptocurrency entails, you can make an informed decision as you consider its strengths and weakness in relation to your business. Most businesses, whether small or big, can benefit from including cryptocurrency as a payment option. It can help you realize an increase in business revenue. Though cryptocurrency has some drawbacks, it can make your business more competitive and simplify how you carry out transactions.