If you are not sure whether your small business should accept cryptocurrency or not, take a pause. Let’s walk you through this article. Adopting cryptocurrency as payment is now a significant outlook for businesses across the globe. That’s because of the revenue potential attached to it. But its associated risks make individuals stay away from it.
This piece carefully examines the benefits attached to accepting crypto payments and explains the risks associated with it. However, you will be able to decide whether you should accept crypto or not by the end of this article.
Accepting Crypto Payment: Pros and Cons
The first—and the most important—thing you need to understand is that what works for you while accepting crypto payments for your business might not work for another business in the same space. That’s because you have different business goals and the capacity to take risks. As much as there are benefits attached to receiving crypto payments, there are disadvantages attached to it too. Let’s ride into it!
Pros of Accepting Crypto Payments
With the continued innovations around cryptocurrency technology, crypto payment acceptance gains momentum and presents businesses and individuals with benefits that make it trump the traditional payment systems. We will examine a few benefits.
- Zero Payment Processing Fees
One significant advantage of crypto transactions over credit card transactions is the absence of processing fees. That’s because crypto transactions don’t involve middlemen such as banks or third parties that process online payments. As a result, your customers don’t need to pay extra charges because you want to accept crypto payments. But be aware that you will pay a fee when you want to convert your crypto to fiat currency.
- Irreversible Payments
Chargebacks are a disadvantage for a business. Some fraudulent customers use this option to take advantage of businesses because a credit card payment system allows it. But crypto payment doesn’t allow reversible payments. This means that the business is the only one capable of issuing a refund. Think of crypto as making cash payments wherein the retailer is the only one capable of refunding cash should you choose to return the product.
- Exposing Business to New Markets
One of the merchants’ headaches is when they have to face the challenges of receiving payments from a foreign customer. The fees charged for such transactions can be inconvenient for business owners and customers. But accepting crypto payments makes transactions easy across the borders. As a result, businesses are exposed to new customers worldwide.
- Enhance Brand Identity
When you accept crypto payments, customers perceive you in an innovative light. They are convinced that your business is forward-thinking as you embrace technology and its potential. This enhances your brand identity and attracts new customers to your business. As a result, you record more sales while your marketing is attributed to embracing innovation.
Cons of Accepting Crypto Payments
There are benefits to accepting crypto payments, but a few disadvantages are associated with it. Let’s examine them.
- Cryptocurrency Volatility
Volatility is commonly attributed to cryptocurrency. It is a reason the market intrigues individuals across ages and races. It can be a reason some individuals decide to stay away from it. But on the other hand, some businesses engage in crypto due to its volatility. An example includes getting paid via $200 worth of Bitcoin (BTC) in the morning and turning out to be worth $1,200 by night. Meanwhile, the opposite can happen by nightfall, wherein your $200 worth of BTC might remain $80.
- Regulation and Tax Uncertainty
Cryptocurrency is a new concept in the financial world. It is a decentralized innovation with its benefits, but it has its drawbacks too. Due to this, lawmakers place it under rigorous scrutiny while looking for a way to govern it. This spells more protection and might not benefit business owners. And that’s because what is practicable now might be prohibited in the future. Likewise, the crypto tax laws are complex, and business owners must carefully record each crypto transaction while filling for tax.
How Businesses Can Integrate Crypto into Their Payment Options
Now that you’ve decided that your small business will accept cryptocurrency for payments, your next move is to set yourself up for transacting digital currencies. It might look daunting because it is a new technology. But the truth remains that you don’t need to be a tech expert before you can accept crypto payments. It has a similar process to opening a new bank account. But crypto terms replace the traditional terms.
However, you must decide how your business wants to accept crypto payments. You can maximize either of the two options available:
- Manual Acceptance of Crypto Payment
- Use a Crypto Payment Processor
Whether you want to use the first or second option, the first action is to create a crypto wallet that you can use to receive cryptocurrencies from your customers. Meanwhile, be aware that these crypto wallets can also send digital currencies to any recipients of your choice.
Some wallets allow only one cryptocurrency like Bitcoin. On the other hand, some crypto wallets, such as AABB Wallet, will enable you to store multiple digital currencies. Another reason you have to choose a crypto wallet is its security. Cybercriminals keep looking for ways to cart away people’s savings, and crypto is not left out. But how well you secure your crypto determines its vulnerability.
However, the underlying blockchain technology behind crypto makes it almost impossible to hack a crypto wallet. Likewise, the available security options like Two-Factor Authentication (2FA) and login key phrases make it hard for cybercriminals to hack your account. As a result, it is more secure to transact with crypto over the internet.
Now that you have a crypto wallet, you can determine if you want to accept crypto payments manually or use a crypto payment processor like BitPay, Coinbase, or PayAABB. Using the crypto payment gateway option is best recommended. You don’t need to have experience before you can use this. And there is support from the platform when you encounter problems. The entire setup is straightforward.
Likewise, some crypto payment gateways like PayAABB have payment processors and crypto wallets included in their offers. Thus, you might not need another wallet to be able to use their payment processor. That’s you achieving two things in just one step.
The final step is determining how you want to accept crypto payments. For instance, accepting it via your website spells that you will need to integrate it into your website. Since you have a crypto wallet already, the process is simple, like you add a plugin to your website.
Should Your Business Accept Cryptocurrency Payment?
Before you decide to accept crypto, you must evaluate your business. Examine your business objectives, model, and customer base. And ensure that it presents your business with immense benefits. After that, you can decide if you want to integrate crypto as your payment option.
However, crypto has become a payment option that will stay in the industrial world. The innovations surrounding it become solutions for inefficiencies attached to traditional payment methods for small businesses. Adopting crypto payments is becoming a global philosophy in the business world. If your business is serious about making more sales, start accepting crypto payments because a section of your customer base is open to that.