According to a late 2020 estimate, more than 2,300 U.S. companies accept bitcoin, which does not include bitcoin ATMs. A growing number of organizations around the world are using Bitcoin and other digital assets for a range of investment, operational and transactional purposes.
Using cryptocurrency for business brings a plethora of options and hurdles. As with every frontier, there are unknown dangers as well as powerful rewards. This is why companies that are considering using cryptocurrency in their operations should have two things: a clear understanding of why they are doing it, and a list of the many questions they should be looking at.
Impact of crypto on the commercial sphere
For years, people have debated the influence of Bitcoin on the corporate sector. The importance of the cryptocurrency market is increasing as the world becomes aware of and accepts digital currencies. The industry is even flourishing day by day with many features and services. Like fiat money, Bitcoin also offers ATM services. Bitcoin ATMs have been installed in various places around the world. You can also find your nearest ATM through the Bitcoin ATM card finder.
As cryptocurrency grows in popularity, associated technologies have become more and more prevalent in the banking industry. Blockchain, the underlying technology that powers bitcoin, was quickly adopted by the big banks. More and more banks are using blockchain technology to authenticate transactions and manage financial data.
Some American companies, such as McDonald’s and Subway, are participating in the monetary experiment. This level of national cryptocurrency support gives cryptocurrencies considerable credibility and attention. As a result, digital currencies may soon become the norm for international trade.
Benefits of accepting crypto payments
The crypto market is booming nowadays. People are more willing to invest in crypto than what we were used to seeing several years ago. People invest their money in these digital currencies and hope to profit from them. Some of them use digital currencies as an alternative to fiat money.
When Tesla CEO Elon Musk revealed in February that the electric vehicle maker would start accepting Bitcoin for payment, companies accepting cryptocurrency became mainstream. He then retracted his statement, citing environmental concerns, but recently tweeted that Tesla would “likely” take over Bitcoin in the future.
Secure and fast
One of the most frustrating aspects of working with overseas consumers is transaction processing times. Not only will you save money, but you’ll also get payments faster – in most cases instantly – if you use cryptocurrency.
In many ways, cryptocurrency is more secure than credit cards or bank accounts; as each transaction is recorded in the blockchain ledger, security and accountability are increased.
Low transaction costs
If they want to offer their customers this convenient method of payment, most small business owners face credit card fees. The fees for international transactions are even higher. However, because cryptocurrency is a decentralized currency, transaction fees are considerably cheaper across the board – and foreign fees are competitive against local transaction fees.
Boost the business
Cryptocurrency offers a technologically advanced cutting edge payment mechanism. If you start using cryptocurrency immediately, your business will be ahead of the curve. This will benefit your brand, generate positive press, and attract tech-savvy customers and staff to your organization.
Better conversion rates and engagement
There are a growing number of consumers looking for merchants who accept digital currencies, so you have the opportunity to tap into this growing customer base. You gain an advantage over your competitors who do not take cryptocurrency by providing a crypto merchant service.
Offering crypto as a payment option on your website is simple and allows you to capitalize on its popularity while meeting current and future customer expectations. Plus, you can protect your development by offering a payment option that your competitors don’t and that your customers trust.
Cryptographic transactions are irreversible
Since Bitcoin payments are irreversible, retailers can be confident that they will receive their money as soon as the transaction is completed. When a transaction on the blockchain is completed, there is no longer any risk of a chargeback or fraudulent payment dispute.
On the one hand, the irreversibility of cryptocurrency gives business owners more control over their financial flows. There’s no chargeback to worry about, and if someone asks for a refund, the store has to refund them manually. This forces your staff to keep meticulous records.
Disadvantages of Accepting Crypto Payments
While this payment method has many advantages, it also has some disadvantages. Some people are really concerned about their safety.
It is not widely accepted
Despite the phenomenal increase in the use of cryptocurrencies and the aforementioned diversification options, it is clear that cryptocurrencies are far from ubiquitous. As the barrier to entry decreases, acquiring cryptocurrencies and buying things with them still requires a higher level of technical knowledge than using a credit or debit card.
Then there’s the fact that there is a plethora of cryptocurrencies for buyers and traders to choose from, with thousands of new coins entering the market in the first half of this year. You might spend a lot of time and money making payments for a currency only to find that its popularity has plummeted in favor of the next big thing, and no one wants to use it anymore. Keep in mind that there is only one dollar. Okay, more than one, but you get the idea.
Even if you last checked the dollar-to-euro exchange rate a few months ago, you could probably make a good guess at what it is now. This is not the case with cryptocurrency. The price of Bitcoin fell from $ 60,000 in April to $ 30,000 just two months later. With such large fluctuations in value on a daily basis, e-commerce retailers risk being hit if they are not careful.
Volatility makes pricing difficult and can make processing returns of items purchased with cryptocurrency much more problematic. As a result, many stores that take cryptocurrency display prices in US dollars and match the dollar price for returns.
Vulnerable to scams
Apart from these difficulties, arguably the most important danger to be aware of is the fact that the bitcoin market is ripe for fraud. Despite the fact that many crypto enthusiasts and experts have praised the security of digital currencies (pointing out that blockchain, the technology behind them, is highly secure), there is no doubt that crooks have taken advantage of Americans’ growing interest in cryptocurrency – and the proof is in the data. Customers lost more than $ 80 million to cryptocurrency scams in 2020, according to the Federal Trade Commission (FTC), a surprising 1,000% increase from 2019.
Complicated setup process
Compared to traditional transaction channels, setting up your bitcoin payment choices can take more time and effort. An alternative is to create your own crypto wallet for your business and accept payments directly through it. Likewise, additional plugins may be required for bitcoin trading to take place in a secure and convenient environment on e-commerce websites.
Another alternative is to use a third-party exchange service, which will work as a middleman between you and consumers, but this would bring additional transaction costs to your wallet.
Migration to different cryptocurrencies
As stated earlier, there are around 2,000 distinct types of cryptocurrency. So what if other businesses, including your customers, switch from one digital currency to another? The value drops dramatically.
Ultimately, whether you accept cryptocurrencies on your ecommerce site is determined by one factor: your consumers. If you are a B2C business and your consumers are clamoring for the ability to pay you with Bitcoin, it is worth investigating. If you are a B2B company, your customer’s requirements as well as the flexibility of your contractual process come into play.
After considering the pros and cons of using bitcoin as a payment method in your business, we hope you can make a decision or come to a conclusion that is beneficial to your organization. When the benefits outweigh the risks, sometimes it’s essential to take a chance.
Meggie is a crypto enthusiast and Top Coins cryptocurrency analyst. Meggie believes that the digital economy is our new future and that people must be ready to develop their potential through technology and innovation.