Plenty of businesses just made up their mind about adding Square, Apple Pay or PayPal to their payment options. Another option of accepting cryptocurrency emerged over the horizon, which has boggled the mind of think-tanks, leaving them at a dilemma.
We bring expert insights, and opinions about using cryptocurrency for your business, while touching the surface of the possibilities that it offers. Is it beneficial for your business? Or is it just a high-risk liability? We’ll let you decide!
What is Cryptocurrency?
It’s simply a digital asset that has a business value through cryptographic protocols to make transactions extremely secure. Thanks to these de-centralized control and protocols, cryptocurrency is very difficult to fake.
Should Your Business Accept Cryptocurrency?
Our experts believe that cryptocurrency enables borderless, near-instantaneous, and cheap transactions. This makes decentralized cryptocurrency marketplace a global service that enables peer-to-peer exchanges.
Large payments that have historically taken very long to clear, can be made instantaneously through ‘crypto’. Cryptocurrency is not affected by any country’s exchange rate, rather it’s universally recognized, making it luring for a business.
What Are the Benefits of Accepting Cryptocurrency?
1- Attracting New Customers
Small businesses can grow their base by adding a cryptocurrency-based payment system to their list of payment methods. According to a survey, 39% people would prefer the addition of bitcoin as a payment method for
2- Lower Cost of Transaction
Transaction costs tend to make a dent in business profits and should never be undermined. With cryptocurrency being decentralized, and having no regulatory authority, the fee doesn’t exist. In addition, the transactions are quicker than regular bank transfers.
3- Curbing Fraud and Chargeback Protection
Secure payment is a game-changer when it comes to digital payments. Cryptocurrency is supported by blockchain technology and hence transactions are final and cannot be reversed. The funds are directly added through mining and transactions can’t be overridden.
Cryptocurrency doesn’t offer debt or loan. That concept is non-existent. It’s impossible to spend what you do not have. This prevents both fraud and chargebacks that make monetary transactions clearer cut and much simpler.
4- Increased Sales & Worldwide Access
Small businesses can expand and open their doors to international buyers for whom their services or products were once inaccessible. This can be accredited to the crypto’s decentralized nature.
It has potential of being a global currency and there can be no boundaries to your business’s digital assets. Crypto has eliminated the obstacles of cash flow on a global scale-waiting time for processing international transactions and high costs associated with exchange rates.
5- Brand Visibility
By announcing that your business is accepting cryptocurrency, you set your business and distinguish it from your competition. Cryptocurrency also has a passionate community of users that’s keen on buying from or supporting a business that accepts this mode of payment.
What Risks Are Involved?
1- Regulatory Uncertainty
Regulatory landscape is subject to change in the near future and lawmakers are still crafting regulations that may need your business to adapt. Accepting cryptocurrency globally means that proper taxes on transactions, and gains should be properly reported.
2- Cryptocurrency Security
Cyberthreats are eliminated by blockchain technology but cryptocurrency doesn’t have a water-tight security. There is no surety that a cybercriminal may not be able to get his hands on your digital wallet. Cryptocurrencies are not insured or backed, and this may incur a heavy loss.
3- Cryptocurrency Volatility
The highest risk involved is the extreme unpredictability due to the floating rate of cryptocurrency. In 9 years, bitcoin rose from pennies in 2009 to almost $20,000 per coin in 2017. Exchanging the digital currency using a merchant service may help to insulate small businesses against this volatility.
4- Technical Barriers
Cryptocurrency and digital wallets are new concepts that haven’t been tested to their limits. There are many technical obstacles that are yet to be discovered that may create a problem for small businesses that are unaware of the technology.
How Can Your Business Accept Cryptocurrency?
To accept cryptocurrency, you need a cryptocurrency wallet or digital wallet that stores private keys and public keys. Unique identifiers are used to mark the ownership of tokens.
What Are Digital Wallets?
Cryptocurrency wallets exist as either software wallets or hardware wallets that, just like traditional banks, hold and exchange cryptocurrency. They allow market makers to partake in the cryptocurrency trading landscape and hold these digital funds.
Trading these currencies comes with a substantial transaction fee that these digital wallets charge. Customers are not able to access their own digital funds directly. The companies handling these digital wallets become third-parties and hold the custody of the customers’ crypto-currency.
Which Digital Wallets Should You Choose?
A great number of startups such as Crypto.com, Coinbase and TenX, offer platforms on which market makers’ can trade and use these digital funds.
These digital wallets contradict the whole idea of cryptocurrency - ‘no involvement of a third-party’. We do agree that these companies provide an extra-layer of safe & effective transaction, and make an easy connection.
Other companies, such as XanPool, are doing quite well to provide instant and non-custodial models for cryptocurrency transactions. In other words, customers can make instant transfers to each other, while the Company’s software assures the instant delivery of the trade. The money, thus, never actually comes under its custody.
This custody-less system catalyzes to serve both end-users and the
company itself. Companies can also partner with these digital wallets and use them as a gateway.
If you’re an entrepreneur or a small business looking to accept cryptocurrency, you should be prepared to adapt to and pivot around
periodic changes in the cryptocurrency in the near future.
Although, the form of digital currency has been quite potent for many businesses around the globe. With more countries standardizing the use
of cryptocurrency, small businesses can prosper if they learn to overcome the technical obstacles and mitigate these problems.
Cryptocurrency shows more potential as an ideal form of payments with the flaws being discovered and treated on a daily basis. Looking at the benefits, if your company manages to hit the nail on the head, we believe you will flourish as a business!