Advantages of Accepting Bitcoin as Payment for Your Business
In recent years, bitcoin has seen a rise in adoption. More people are now buying and selling bitcoin—but what can we attribute this to? There are a lot of factors to the rise in adoption. First, buying and selling bitcoin is now much safer than it was before. Bitcoin became the talk of the town in 2017. Since then, the hype has died down. Lastly, there are multiple real-use cases that make bitcoin more than just an investment tool. With the rising popularity of peer-to-peer bitcoin marketplaces, people are starting to discover real-use cases for peer-to-peer bitcoin trading. With more people learning the benefits of bitcoin, people can use the digital currency in everyday situations with their bitcoin wallets. More and more businesses are accepting bitcoin as payment for their goods and services.
Now, this poses a question to all business owners: “Should I start accepting bitcoin as payment for my goods and services?” As a business owner, you should always be looking for ways to innovate your business and grow it even further—and in some cases, accepting bitcoin may just be the way to do so.
The Pros of Accepting Bitcoin as Payment
The list of advantages of accepting bitcoin as payment is one that grows as much as bitcoin develops. At this point in time, this means of payment can very advantageous to business owners around the world.
Wider Market
Accepting bitcoin as payment for your goods and services will allow you to widen your customer reach. As mentioned earlier, one of bitcoin’s real-use cases is the ability to make payments easier. Since bitcoin circumvents a lot of traditional barriers (such as payment intermediaries or banks that close on weekends, holidays, and during certain hours of the day), making payments—even abroad—is much easier with bitcoin. This will allow you to advertise a (relatively) new and easier payment method for your business.
Bitcoin has no borders and can be sent anywhere and at any time, allowing you to expand your reach to a global scale as you hit more markets.
Cost-efficiency
Alongside making payments much easier, bitcoin alleviates transactions of a lot of unnecessary fees. With traditional means of payment, middlemen like banks and payment intermediaries are often used to complete the transfer of money. However, the use of traditional institutions like those will often charge extra for their services.
Bitcoin payments, with its ability to circumvent the need for banks and payment intermediaries, charge fewer transaction fees and are often much faster. In most cases, the fees (and rates) will depend on the exchange or marketplace you’re using to send the bitcoins but generally, they’re much lower than the standard fees you’ll be charged when using a bank or payment intermediary—usually cents on the dollar.
Aside from that, bitcoin payments are also much faster and more transparent. Traditional methods of payment can often take days (best case scenario, it’ll take less than 24 hours) to process, especially if you’re using a bank that isn’t directly partnered with the receiving end of the payment. Bitcoin transactions, on the other hand, will take up to 10 minutes for the money to travel into the wallet of the receiver. Bitcoin transactions are also more transparent as people are sending money directly to their recipients instead of jumping through several hoops to make sure that the payment comes through.
Security
Not that traditional methods of payment aren’t secure, but bitcoin transactions are some of the most secure in the world. Due to its complex hashes, it is extremely difficult (if not impossible) for anyone to manipulate the transaction records. Each transaction is also recorded on a public ledger for everyone to see and although personal identities are obscured, there are wallet addresses that are linked to each transaction.
With the growing adoption of bitcoin, KYC/AML laws are also starting to be implemented on exchanges and marketplaces—preventing any illegal acts funded by bitcoin.
Good Marketing
Looking for the next campaign for your business? Bitcoin can be a good start. Press releases can be planned. You can even use it as an event or milestone in your company. It’s a new kind of marketing strategy that will show cryptocurrency enthusiasts that bitcoin doesn’t have to be just an investment tool—it can be used for much more than that now (and with adoption on the rise, this is true now more than ever).
Accepting bitcoin as payment is a good way to spread awareness for your brand—especially if it fits within the scope of your business (IT, FinTech, etc.). If you have the right good or services available, it could be a match made in heaven. For example, if your business is techy and most of your products and services are built around technology, accepting bitcoin could be a way to show that your company is progressive and forward-thinking. Nevertheless, even if you aren’t in the tech industry, anything could be a great selling point with the right angle.
The Cons of Accepting Bitcoin as Payment
Just like everything else in this life, every set of pros has its own set of cons—and bitcoin is no different. Despite the ever-growing cryptocurrency evolving to help minimize these cons, they’re still there nevertheless and it’s important to take them into consideration before accepting bitcoin as payment for your goods or services.
Volatility
Bitcoin is infamous for its rapid price gains and dips. As a business owner, these fluctuations can cost you. For example, let’s say that you start bitcoin payments and a flurry of customers start paying with bitcoin. While holding all the profits, the price of bitcoin drops. This results in a big loss for you. You’ll have to at least wait until the price goes back up (which can take a while) or cut your losses and convert it back into fiat.
The quick fix for this is to convert your bitcoin profits immediately into fiat to prevent sudden price drops. It also doesn’t necessarily have to be fiat. If you’re using a peer-to-peer marketplace, you can easily convert your bitcoin into gift cards (usually discounted), cash, or any of the other available options.
Complex Technology
Other than its extreme volatility, bitcoin can be a little intimidating to those who have never dealt with it before. It’s safe to say that the use of bitcoin, in general, has a learning curve to it—at least if you’re looking to minimize the risks as much as possible.
As a business owner, you’ll need to educate your customers on how to transact with bitcoin and why it would be beneficial for them to use. This means that there’s a lot of research needed on your part. In other words, you’ll need to do your homework. If you aren’t willing to put in the work (in terms of the research), it could result in profit losses for you.
Uncertain Regulations
Depending on where you are, the regulations of bitcoin transactions may be unclear. There are still a lot of governments and financial institutions that are unsure of how to regulate these kinds of transactions and when they do figure out their stance on it, business owners such as yourselves will have to adapt quickly or face legal consequences.
Accepting Bitcoin as Payment – How to Get Started
If you’ve decided to start accepting bitcoin as payment for your goods and services, there are a couple of ways to get you started. Before anything though, make sure that you do your research and learn the nature of these transactions. That way, you’ll be able to minimize any risks that bitcoin transactions have. If you haven’t traded bitcoin, you can also try investing small amounts at an exchange or marketplace you like. It’ll give you the much-needed experience needed to survive.
Once you feel that you’ve done enough research, you can start accepting bitcoin in a few small ways:
Small Signs/Banners
If you operate your business on a website, you can put little banners, signs, or widgets that show your support for bitcoin. This is a good way to start if you’re expecting too many people to immediately pay with bitcoin. Start with a small banner that says “We Accept Bitcoin Here!” (or something like that) and give them the address to your bitcoin wallet. From there, you can have customers contact you directly when they want to purchase with bitcoin.
To help keep transactions safe and secure, there are several escrow services. You can use them to make sure that customers feel safe when trading with you.
Payment Intermediaries
If you want an easier and more “official” way of accepting bitcoin, there are payment intermediary options out there for you. These services will help you set up “Pay with Bitcoin” buttons and terminals that will help you streamline the entire payment process. They’ll give you lines of code to directly input onto your site and have their widget embedded. These are the simplest and most convenient ways to accept bitcoin. But it’s important to know that these services will charge a small amount for their work.
Accepting Bitcoin as Payment – Business Before Anything Else
Despite how awesome it sounds to start accepting bitcoin as payment, it’s important that you stay true to what’s best for your business. Accepting bitcoin usually isn’t a make-or-break decision, so make sure that everything else is in order before even considering it. Now you understand the advantages and disadvantages. Make sure that you clearly assess the need for it before anything else. Remember: the welfare of your business should always be priority number 1. If there are other pressing matters, attend to those first then think about accepting bitcoin.
If you do decide to start accepting bitcoin, then great. This can’t be stressful, but make sure that you do your research. Bitcoin can get a little tricky sometimes. You need a lot of knowledge about the subject matter to stay calm. Consider panic and rash decisions to be your greatest foes. They are the ones that will cause you to lose the most money. Having a good knowledge base of bitcoin and how it works will help you stay calm and clearly assess everything before panicking.