Technology is constantly changing how businesses and customers interact with each other and the wider world. Currently, the internet is in a slow transition from Web 2.0 to Web 3.0 functions, which involves a shift towards decentralization and blockchain integration.
These changes are pushing cryptocurrency payments into the limelight, with many major players now accepting digital coins as valid tender.
Operating a business in 2022 involves catering to as many payment methods as possible, but should your small business be accepting cryptocurrency?
Crypto-What?
Cryptocurrency started with Bitcoin back in 2009, and it’s exploded in scope over the last thirteen years. Crypto operates on blockchains, which are decentralized infrastructures that securely record transactions (movements and changes). The nature of blockchain means there’s no governing body sitting at the top, as ownership is shared across the community and proof-of-stake involves cryptographic tasks.
As a small business, you may wish to accept cryptocurrency payments because it launches into the realm of current technology and will help to attract new customers. Further, it will help to reduce instances of fraud. But you need to consider whether it’s the right direction for your company.
Crypto Payment Benefits
When compared to traditional payment options, there are many benefits when accepting cryptocurrency including:
- Convenience. Crypto payment options allow customers to securely pay using their digital assets, without worrying about data vulnerability.
- Merchant protection. Fraudulent chargebacks are detrimental to businesses. Crypto payments eliminate the risk because all sales are final and irreversible – unless you choose to send funds back.
- Reduced transaction costs. Crypto is a direct payment option, eliminating the need for third-party processing. Therefore, you won’t need to pay any costs related to transaction fees, which often come in at 2-4% of transaction totals.
- Boosting sales. Cryptocurrency knows no boundaries, meaning you can easily open your doors to overseas markets.
Crypto Payment Risks
There’s no denying the benefits of accepting cryptocurrency payments, but you need to understand the risks involved:
- Volatility. Cryptocurrency isn’t tethered to real-world assets, making it extremely volatile. You may take $1000 in cryptocurrency one day that’s worth much less in the future. You will have to watch the market and take assets out at the best time.
- Tech hurdles. You will need to set up a digital wallet and manage your assets, which may be difficult for a small business.
- Security. Crypto does remove fraud and other cyber threats, but it’s now 100% threat-proof. If anyone gets hold of your private keys, you can wave goodbye to your assets.
How To Start Accepting Crypto
You will need a reputable digital wallet first – we recommend the DeFi wallet because of its compatibility with hundreds of cryptocurrencies. Next, you will need to sign up with a payment processor from the likes of PayPal or BitPay. Alternatively, you can accept crypto payments directly, but it calls for more tech know-how.
Blockchain tech sits at the heart of the internet revolution, making cryptocurrency a worthwhile payment method. When deciding to accept crypto as a small business, you need to weigh up the benefits, risks, and costs involved.
