Is it smart for businesses to accept Bitcoin and other cryptocurrencies?
As of this year, millions of companies worldwide accept bitcoin and other cryptocurrency payments for services and products due to the transactions’ speed, ease of use, and ability to do business without the intervention of an intermediary payment processor. In 2021 PayPal added the crypto payment method for its users, and several other big names like Tesla and Starbucks have been considering accepting crypto payments as a result of a mass-scale adoption of digital tokens in all industries.
Digital currencies are breaking barriers in the payment sector, and with the rise of online shopping and digital payments, the public is looking for diverse ways to pay for their purchases. Cryptocurrency might not be a traditional form of money, but it delivers a similar approach to how people pay.
This blog presents the advantages companies get if they offer cryptocurrency payments – like fraud protection, fast funding, reduced fees, and increased transactions speed.
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What is cryptocurrency
However, before discussing the benefits an organisation gets by accepting crypto payments from its clients, it’s crucial to understand the concept of digital currencies. Most people have heard of Bitcoin, the most popular crypto in the industry, but Bitcoin is only one of the thousands of coins available. Cryptocurrency is a term used to define a decentralised, digital, and tradable currency managed within a computer network, also known as the blockchain. The digital ledger or blockchain records all transactions and records of ownership. However, after the transaction is encrypted, only the intended recipient can read it.
Cryptocurrencies enable the transfer of assets between individuals via a decentralised peer-to-peer network without the involvement of a third party. As the confidence and security increase in digital tokens, the acceptance also does.
Studies show that one in 10 US residents currently trades crypto. Besides integrating the asset into their investment portfolios, they also use it to purchase services and goods.
The rise of digital currency acceptance among organisations
Cryptocurrency isn’t new in the financial sector as it was introduced in 2009. However, it has become more widely accepted as a payment method since the adoption of innovations that enable the technology to cut costs, reduce fraud, and mitigate risks. Digital tokens’ rise in popularity began after the Bitcoin software was launched in 2009. In 2021 around 330,000 bitcoin transactions were processed, so, understandably, consumers are eager to use the cryptos in their wallets to pay for online and offline purchases. Brands like Microsoft, Expedia, and WordPress are among the first to have adopted crypto payments and provided their public with lucrative investment opportunities.
Because cryptocurrency usage has gained more popularity over the last months and organisations in a myriad of sectors have started to accept it as a form of payment, it facilitated business opportunities for merchants.
Why should businesses accept cryptocurrencies?
Crypto payments are on the rise, hence it is no surprise that more companies are looking for ways to implement payment processing technology that enables digital token payment. Even if organisations can create their own wallets to accept payments, it’s recommended to work with a technology provider to cut down any associated risk and provide secure wallets. The same platforms inform the users what is the price of bitcoin and give information on crypto evolution to help them determine which coin to integrate into their payment system.
In addition to offering increased payment flexibility, here are some other benefits companies get if they accept crypto payments.
Reduced transaction costs and increased speed
When you rely on credit cards for payment, you pay 2-3% per transaction. But if you switch to Bitcoin, the cost of the transaction fee depends on how quickly you want to process the transaction. Therefore, cryptocurrency payments have lower transaction fees than traditional methods.
Safety from fiat exchange rate risk
Cryptocurrencies are volatile, but you can bypass this feature if you set prices in your local currency and convert digital tokens into your currency of choice after the transactions are completed. Cryptocurrencies can act as the medium through which you make a transaction.
Digital coins are based on the blockchain, which is a decentralised and distributed ledger that prevents users from modifying or deleting transactions. All transactions are permanent, so there are no chances for fraud. Depending on your payment processor, you can even benefit from additional security measures like blockchain monitoring services or AML.
Crypto payments allow you to expand your client base worldwide and deliver your goods to new audiences. The only limitation is how far you’re willing to ship your products. Digital currency transactions allow you to skip the most painful part of addressing the international market, doing business with banks and waiting more than three days for them to clear a transaction.
Dealing with chargebacks is overwhelming for businesses of all sizes because they often cause revenue loss. If you fall victim to a credit card dispute, you can lose money dealing with the expenses a chargeback triggers. Studies show that the number of chargebacks is expected to reach 409 million by 2023, and it’s best to avoid being the victim of one. If you integrate crypto payment, there’s no third party to facilitate the transaction, so the cardholder cannot file a dispute to reverse it.
How can companies accept crypto payments
Organisations should position themselves to adopt innovative technologies that allow them to serve cryptocurrency holders. Research shows that over 50% of crypto owners want to purchase services and goods from companies accepting this payment method. No matter the size of your business, accepting cryptocurrency payments from your clients is simple. You must integrate a payment gateway that supports the digital token of choice and offers fool-proof solutions for online payments. Ensure the payment gateway you choose offers convenience, functionality, immediate payments and user-friendly features.
With the increasing popularity of cryptocurrency, companies must accept digital payment solutions. It won’t only help you attract more clients but also enable you to cut down transaction fees and process payments faster.
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