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What do Starbucks, Home Depot, Microsoft, and Whole Foods have in common? They accept cryptocurrency as a form of payment for their products and services. And it’s not just major corporations that are accepting crypto transactions. An increasing number of companies are starting to allow customers to buy with Bitcoin and other cryptocurrencies.
So, is your business missing out on anything by not accepting the best new cryptocurrencies or the ones that have been around for years? And are there any downsides to accepting digital currencies in exchange for your goods or services?
There are many reasons why businesses should accept cryptocurrency transactions, meaning your business is missing out on unique benefits that only digital assets can offer.
Decades ago, when bank card transactions were first introduced, hundreds of businesses refused to change from cash payments because of the transaction fees associated with debit and credit cards (up to 5%).
With the introduction of cryptocurrencies, businesses can once again enjoy lower transaction fees, of just a couple of cents or up to 1% of the total transaction. This smaller amount can save businesses a lot of money over time, especially if the company processes thousands of transactions.
Accepting crypto transactions will make your business stand out from the competition, especially if you’re in an industry where crypto payments are not yet common.
This is likely to attract an entirely new, tech-savvy customer base, like millennials and Gen Z.
You will also open your businesses to a global market, since crypto transactions can be performed across borders without worrying about currency exchange rates. You’ll be better able to serve international customers, which is important if you’re in the travel, hospitality, luxury goods, or digital services market.
Typical bank transfers or card payments can take up to 5 days to reflect in your business account. However, crypto payments are almost instant when the customer scans the QR code or uses a crypto payment app to complete the transaction. The transfer from the customer’s crypto wallet to your business crypto wallet will take a few minutes to an hour at most.
This will significantly improve your cash flow, with no latency between a sale and getting the money.
Chargeback fees are faced by all business owners, since they have no solution for a false chargeback claim due to buyer protection policies from credit card companies. These fees can be up to $25 for each chargeback, and there’s no way to challenge the fee.
Cryptocurrencies are very similar to cash transactions. Customers can’t report the transaction to a bank to initiate a chargeback. If they have an issue, they will have to contact your business directly to work out a refund.
According to the US Chamber of Commerce, fraudulent transactions increased by 35% since 2020. Small businesses accepting card transactions were the main targets of this fraud.
Crypto transactions are much more secure than traditional payments, since all payments are logged on a public blockchain ledger and the crypto is transferred directly into your wallet, without a third-party intermediary.
When you receive a cryptocurrency payment, you can decide whether you want to hold it as crypto or convert it to your desired fiat currency through a third-party processor like Coinbase or CoinGate. Once converted, you can use that money for business expenses.
Accepting crypto payments is not just good for the present moment; it will also be a strategic decision for your company’s future. Crypto adoption is steadily becoming mainstream, with millions of crypto holders in the US in 2024. And many of these people want to be able to transact with their digital assets.
A business that accepts crypto transactions is perceived as flexible and innovative, and willing to adapt to the changing payment preferences of its customers.
Before deciding if you’re missing out by not accepting cryptocurrency payments, you should also acknowledge the potential downsides for your business should you change your payment system to allow these transactions.
When you weigh the pros and cons of accepting crypto payments, it seems clear that your business might be missing out. The world is changing and moving increasingly online, and digital assets are becoming more mainstream. By allowing customers to pay using select cryptocurrencies, you’re cutting out the middleman (banks or payment processors), reducing your costs, and enabling more secure transactions.
