In the modern economy a business hoping to be successful will need to be prepared to accept a multitude of different currencies. Right now, that usually means accepting cash, card, and mobile payment services. As cryptocurrencies such as Bitcoin become more widely adopted, businesses will have to confront the possibility of accepting these new currencies as valid methods of payment. Here are 6 reasons your business will benefit from accepting cryptocurrency.
Lightning Fast Transactions
When accepting credit and debit cards, businesses often have to wait multiple days before being paid for their goods and services. The processing is so slow because the payment has to be verified by various third parties, namely the issuer of the card and the bank of the vendor. When accepting cryptocurrency, none of this comes into play. Transaction times for crypto range between a few minutes an instantaneous, meaning your company will get the money it’s earned without having to wait. This is made possible by the way blockchain coins verify transactions, making use of a decentralized network of ‘miners’ to verify payments on a public ledger.
The quick transactions apply to more than just local transactions too, so a business can reach international customers, without having to deal with increased transaction fees and times.
By using cryptocurrencies, companies can bypass many of the fees associated with traditional payment methods. Since 2017, businesses have paid over $90 billion in processing fees for accepting card payments. Utilizing blockchain currencies avoids these fees, saving your business 2 to 5 percent on average per transaction.
Among the fees eliminated are chargebacks, which can be costly to vendors and customers alike. In this way crypto coins function like cash in that either a customer can pay or they can’t.
Securing Sensitive Information
Dealing with a bank means providing them with sensitive data. They’ll know your credit score, financial info, address, phone number, transaction history, and tons of other information. While that might not seem like a problem at first glance, banks have lost control of this data in the past. There’s no reason to assume they won’t again. Conversely, blockchain currencies require far less information to use, with payment processors only requiring name and shipping address. The most you’ll know of a transaction is an id and a wallet address. This makes it near impossible for those with malintent to access your data.
It isn’t just your information you should be worried about, either. Statista found that 17 percent of people shopping online abandon their digital carts due to concerns relating to security. By providing customers with the option to pay in Bitcoin, a vendor can give customers a more private shopping experience, not having to worry about how their personal data might be used. Even in person transactions can benefit from using Bitcoin, as there is no identity trail that might result in the theft of the consumer’s identity.
Some modern payment methods such as credit cards can make it harder to protect your company from fraud. With cryptocurrency, the system itself verifies funds to prevent users being able to spend more than they actually have in their account. On top of this, both parties taking part in the transaction have to approve it before it goes through, and approved transactions become permanently marked on a public ledger. As a result, traditional fraud is much harder to perform.
With Bitcoin and other similar cryptocurrencies being available for purchase and use worldwide, merchants who accept them are able to tap into markets they may have otherwise not been privy to. Since there aren’t any additional fees and transaction times associated with long distance transactions in cryptocurrency ecosystems, using coins becomes a much more attractive option for international customers.
Besides new foriegn customers, you’ll also become more appealing to tech enthusiasts and early adopters who have already bought into crypto. Since the market will have fewer options, and because the move to accept the coins signals that a business has similar values, these customers are much more likely to become recurring users of your service.
Getting Ahead of the Inevitable
While it won’t happen overnight, physical versions of fiat currency aren’t going to be around forever. They can be clunky and burdensome to use, and are easy for thieves to steal. Much of the transition away from cash has already been made thanks to the advent of debit and credit cards, but cryptocurrencies are only going to further the disuse of physical currency exchange. By adopting the use blockchain currencies ahead of time you’ll have a head up on competitors, who’ll struggle once they are forced to make the change.
How to Accept Cryptocurrencies
Once a business has decided it’s in their best interest to adopt cryptocurrencies as a payment method, they’ll have to go through the process of actually setting themselves up to be able to. There are two major ways to go about this.
Using a Third-Party Payment Processor
For companies who are just getting their feet wet with blockchain currencies, the easiest way to start processing customer payments is using a service such as Coinbase or BitPay, which will handle the processing in a way very similar to that of a credit card payment processor. All coins exchanged in a transaction will then be converted to fiat currency in real time, so you can increase customer options without any significant amount of work. This is the quick and direct option.
Using a Merchant Wallet
For those looking to retain greater control over the currencies being exchanged and breaking free from third parties, a merchant wallet is the way to go. Blockchain currencies are usually kept in a ‘wallet’, which is like a digital storage box. These aren’t difficult to setup, but it does entail a greater management duty on the vendor’s end. It also means that you won’t be instantly converting the virtual currency into fiat currency, allowing you to reap to profits of a value increase, or to suffer lost profits due to the value of a coin decreasing. Once you’ve finished setting up the wallet you’ll need to integrate it with your points of sale. After that your business will be able to handle the transactions.
With a quick and easy setup and numerous benefits for companies and customers alike, even businesses who don’t believe blockchain currencies and technologies will be vital in the future have few reasons not to accept cryptocurrencies as a valid method of payment.
This article is not financial advice. The content above is strictly the opinion of the author. Do thorough research before investing in any asset.