Should your business add cryptocurrency to its payment options? Here are some reasons it's a good idea – and the steps you'll take to make it happen.
Not sure what cryptocurrency is? Cryptocurrency is simply a digital currency that relies on encryption technology to transfer the value via the internet. This form of currency operates independently of a banking system and can be used in many countries like cash. The most common use of cryptocurrency is selling and buying goods or services online.
Cryptocurrency is another way businesses can accept payments from customers or pay vendors. Wondering if accepting cryptocurrencies is the right fit for your business? The answer depends on your business's needs, but typically, cryptocurrencies are advantageous for various reasons. Take a look at these six reasons accepting cryptocurrencies can help your business grow and succeed.
1. It will save you money.
Over the years, U.S. merchants have paid over $78 billion in fees related to credit and debit card processing. Cryptocurrencies are decentralized, so they do not require a bank to verify every transaction. This means your business will eliminate those fees, saving 2 to 5 percent on each transaction. This is also the case with companies like PayPal and Stripe. No more sharing your hard-earned revenue with financial institutions.
One important thing to note is that many merchant wallets charge a flat fee of around $30. There are decisions all entrepreneurs will face, and usually those revolve around whether you're ready and willing to embrace change and the learning curve that comes with it.
2. Transactions will process quickly.
It's frustrating to wait for funds to become available in your bank account. You don't have to wait with cryptocurrency transactions. In many cases, the transactions occur in real time or within a few minutes. There aren't various banks slowing down the payment process. High transaction speeds are a bonus; in today's world of instant gratification, no one likes to wait.
3. The currency works worldwide.
There are a lot of benefits to an international currency, and it's especially helpful if your business exports services and goods or purchases materials from other countries. Bitcoin and other cryptocurrencies help you avoid the expensive foreign transaction fees or exchange rates.
4. You will avoid fraud and chargebacks.
Cryptocurrency is comparable to cash in that you either have the funds available or you don't. You should also know that all transactions are final when you use cryptocurrencies, because transactions are added to the blockchain via mining.
This system verifies funds and makes it next to impossible to spend more than you own. When paying with cryptocurrencies, both parties have to approve each transaction. As a result, there are no disputes to worry about and chargebacks will no longer happen.
5. You can acquire new customers.
Cryptocurrencies have some major followers – more and more people are learning about it, embracing it, and even turning to companies like SwissBorg to help manage crypto assets and learn about investment solutions. As your customers become familiar with and begin to use cryptocurrencies, it will really help your business if you accept digital currencies.
While this may still be a niche market, it won't be for much longer. The more payment options you offer your customers, the better. Not only will you attract a wider customer base and more shoppers, you'll also increase the chances that they all follow through with their intended purchases. According to a survey by Skrill, 28 percent of shopping cart abandonment is due to lack of the payment option the shopper wanted to use. Do what you can to shrink your shopping card abandonment rate so you can increase your revenue.
6. Paper options will slowly become a thing of the past.
Digital wallets and cryptocurrencies are growing steadily with the blockchain and Bitcoin both having banner years in 2016. This trend continued through 2017 and is anticipated to continue to grow as people become more familiar with digital currency.
While it may seem overwhelming for a small business, try to embrace this change. It makes a lot of sense for you and your business to become early adopters of cryptocurrencies so you can become familiar with it sooner than later. If you resist the change now, you'll just delay the inevitable. Set yourself apart from your competitors by welcoming fintech.
How to accept cryptocurrency
In most cases, it's a good idea to go ahead and accept cryptocurrency. Consumers are using it more and more. The benefits, such as lower fees than credit and debit cards, the inability to reverse transactions, and real-time bank balances make the acceptance a good idea.
If you're ready to get started, the process is simple. In less than 30 days, you can start and finish the entire process, from general education to integration. You'll follow these three steps.
1. Set up a merchant wallet account.
It takes just minutes to set up these wallets, which offer customizable portals and convert cryptocurrency to your base currency.
Some merchant wallets accept Bitcoin exclusively, while others accept multiple types of cryptocurrencies. Understand the types of currency your merchant wallet accepts before telling your customers what forms of payment you can accept.
2. Integrate the cryptocurrency options into your points of sale.
Now that you have your merchant wallet account and know the public address, you need to integrate this address into each of your points of sale. Your physical POS system should include an app that can generate your QR code that customers can scan to send coins. The app works on a tablet or smartphone. It's easy to accept and manage customer payments. You should also add a cryptocurrency payment option to your online shopping cart.
Don't forget that your digital and physical invoices can accept cryptocurrency too. You can incorporate your QR code or public address on each invoice, and customers can send coins via your QR code with their smartphone or go online and type in the address.
3. Link transactions with accounting software.
Business owners are often confused by how cryptocurrency relates to taxes. It's not too tough to adhere to tax laws, though – you just treat the revenue as a cash transaction. The majority of merchant wallets convert cryptocurrency to cash. Check with the IRS for best practices.
The bottom line is that, in most cases, small businesses can benefit from accepting cryptocurrency. There are pros and cons, but the process is simple and the downsides of accepting cryptocurrencies are small, thanks to merchant wallets and the automatic conversion of the currencies to cash. If you want to keep your business competitive and gain new customers, it's time to learn more about cryptocurrencies and embrace the fintech changes with open arms.