Bitcoin’s meteoric rise to nearly $39,000 per coin last fall sparked a rapid growth of digital currencies and widespread interest in blockchain-based solutions.
What is Bitcoin?
Bitcoin is a decentralized, digital currency that can be utilized to purchase products and services, but it may also lose or gain value, much like stocks.
During the pandemic, many businesses have turned to crypto to safeguard their cash reserves, seeing currencies like Bitcoin as a safe wager in an economic climate. In addition, because there is a set amount of bitcoin and other cryptocurrencies, they are considered inflation-proof because the government can’t influence their value.
Although it has significant value, its price is quite volatile, therefore relying on it comes with a degree of risk.
Should Your Business Accept Bitcoin?
Bitcoin is still the most popular cryptocurrency accepted by merchants, though Ether, the second-largest cryptocurrency, is gaining ground. Accepting Bitcoin has become a necessity for businesses with customers worldwide who want to avoid bank transaction fees, lengthy processing times, and the additional hassle of converting to a different currency.
For a variety of reasons, small businesses may want to accept Bitcoin. For example, they might be ahead of the curve regarding technology, attract consumers that use cryptocurrency, or prevent fraud.
Benefits of accepting Bitcoin
Some of the main advantages of Bitcoin over a traditional point-of-sale system are:
Accepting Bitcoin and other cryptocurrencies is a way to reduce the transaction fees that typically plague standard payment methods. For example, you will save money on accepting credit cards and other services without any processing fees.
Since many cryptocurrency transactions are irreversible, there’s little risk of fraud or chargebacks. Furthermore, fraudulent transactions will not show up later, claiming their payments were never received, leaving you with nothing to lose!
The security of a decentralized network is also evident in the protection it offers merchants from fraudulent chargebacks. Because no third-party can reverse charges, the transactions are final, similar to cash.
Provide Potential Customer Benefit
Use Bitcoin as a marketing tool for your business by allowing customers to pay without overpaying for products and services. Users can get around paying unnecessary fees typically associated with large banks or companies such as Western Union or Paypal. Once a movement has been initiated, it cannot be charged back.
Reach Consumers from across the Globe
Accepting Bitcoin is a great way to attract new customers because it allows access to all demographics and geographies, which means geographical locations or currency types don’t limit you. Whether your business operates at a physical location or online, bitcoin payments can be accepted wherever both parties have access to the internet without specific software installations, allowing you to grow exponentially.
Risk of Accepting Bitcoin
Although there are several benefits of accepting Bitcoin, there are also factors that could deter businesses from adopting it as a payment method:
Because Bitcoin’s value fluctuates so widely and rapidly, many small businesses tend not to accept them and other cryptocurrencies. Although merchants do have some protection against volatility through instant exchanges and price matching, the risk of cryptocurrency fluctuating before a sale is still there.
Low Awareness among Both Customers and Merchants
Although it’s estimated that 46 million American adults currently own a share of Bitcoin, only 1 in 5 admit to having ever used them for purchases. More than likely, consumers don’t know about or understand cryptocurrencies and might not trust them yet.
Technical Difficulties and Customer Convenience
The technology behind Bitcoin can be challenging for both businesses and customers alike; therefore may prove difficult to adopt as a payment method by both merchants and their customers. Also, because it has such low awareness within the general public, you’d have to provide comprehensive instructions on how to use them should you accept these types of payments.
There’s a lot of uncertainty about how the government around the globe will resolve problems in its regulation as cryptocurrencies are relatively new. Although the legal status of Bitcoin still isn’t fully determined, it’s slowly gaining acceptance.
Final Words on Accepting Bitcoin for Your Business
The benefits of accepting cryptocurrencies are evident in their use as a more efficient payment method that can also be used to attract new customers. Although there’s currently a risk associated with fluctuating values and low awareness, these factors can easily be resolved due to cryptocurrency being a relatively new industry. Once the legal ambiguities have been clarified, investing time into researching how your business can benefit from cryptocurrency transactions would be well worth it.
You’ll need to do some research to determine what sort of risk you’re willing to take before accepting any cryptocurrency for your business.