Cryptocurrency payments are the next step in the evolution of payment methods. A digital currency that we can use anywhere and almost everywhere. Many major companies are slowly adopting cryptocurrencies as a payment option. As much as the credit card and debit cards still play a major role in payments from customers, the crypto wallet is now taking the spotlight.
As a business owner, you need to be aware of this new form of payment and consider whether to incorporate it into your payment processors. But first, let’s see if your business should accept cryptocurrency based on the circumstances.
The Advantages of Using Crypto Payment
1. Lower Transaction Fees
The absence of a central intermediary cuts transaction fees significantly. Small businesses that accept credit card payments through credit card processing companies typically pay roughly 25 cents per card swipe plus 2% to 4% of the overall transaction amount. These expenses pile up, which is why credit card purchase minimums are frequently set on POS systems in smaller establishments. Accepting cryptocurrency can lower these fees to less than 1% of the transaction value.
2. More Sales
Crypto allows small businesses to grow and open their doors to foreign shoppers who could not previously access their products and services. One modest electronics retailer, for example, claimed selling $300,000 in items to roughly 40 nations by taking cryptocurrency.
3. Merchant Protection
The decentralized nature of cryptocurrency also shields merchants from false chargebacks. Transactions are definitive, much like cash, because no third party may reverse charges.
4. Customer Convenience
Crypto adoption gives your customers more payment options during the checkout process. Crypto transactions also give your customers better protection than payments via credit card for example, keeping their information safe.
How to Enable Cryptocurrency Transactions
If you decide to go and begin taking cryptocurrencies, there are a few procedures you must do. Overall, the procedure is comparable to signing up with a credit card processing business.
To begin, you’ll need to pick whether you wish to accept payments through a processor or manually. Using a processor will ease the procedure; to begin accepting payments, you will need to register with a business such as BitPay or PayPal.
You can also manually accept cryptocurrency payments to your business, although the process is a little more involved. First, you’ll need to open an account on a cryptocurrency exchange (such as Coinbase) so that clients may send you money. Then, you may integrate functionality (like a QR code) into your website so that clients can pay cryptocurrency to your exchange account.
Finally, you must remove your cryptocurrency from your exchange account, either by transferring it to a digital wallet or trading it for dollars and sending the proceeds to your company bank account.
The Downsides of Cryptocurrency Payment Options
1. Technical Issues
Accepting a cryptocurrency like bitcoin necessitates the creation of a digital wallet on a digital currency exchange, which may be technically difficult for small business owners who are unfamiliar with the technology. Cryptocurrency is an information-dense industry with a somewhat high learning curve, which can be a bit of a problem when running a business.
2. Market Volatility
The greatest risk to digital money is price volatility, which makes its worth exceedingly volatile. Bitcoin, for example, was initially valued in pennies in 2009 but has now risen to more than $290, 000 per coin in 2022.
Using a merchant service provider like BitPay or Coinbase protects small companies from this volatility by instantly exchanging digital money for cash. Payments for bitcoin are done in real-time for the currency’s current value using these services.
According to Wolanow, the only rationale for a firm to keep bitcoin is as a speculative investment, but this essentially equates to gambling with your revenue stream.
3. Crypto Asset Security
Although cryptocurrency transactions reduce cyber concerns such as stolen credit card details, the money is still not completely secure from cyber attacks. There is currently no method to totally prohibit fraudsters from gaining access to consumers’ wallets. This is especially risky since, unlike fiat currencies such as the US dollar and the euro, cryptocurrencies are neither backed nor insured.
Adopting New Forms of Payment
Digital payments are evolving, online transactions are evolving, and financial transactions are evolving! Thousands of businesses are using this as an additional payment option that is proving to be more convenient for customers.
There are still downsides to using numerous cryptocurrencies as a form of payment, but crypto payment platforms still do more good than bad. Very soon this may be the currency of choice for transactions in the digital world. Hopefully, you have more insight into whether your business should accept cryptocurrency.
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