Over the last few years, crypto pay has been making waves in the corporate world. It has already endeared itself to big companies like Subway, Expedia, Microsoft, and Overstock.
But the big question is – has the time come for small and medium-sized companies to start accepting crypto payments?
The idea of an unregulated digital currency is still a mystery to many small business owners, as some can’t even tell the difference between online payments like PayPal and cryptocurrency. Regardless, cryptocurrencies are here to stay and you might as well get on board.
But what are the implications of such a call for your business? Read on to find out.
Pros of Crypto Pay
Here are some reasons why you may want to start accepting crypto pay.
1. Protection from Charge-Back Fraud
One of the biggest challenges facing online retailers is charge-back fraud. This is a form of fraud where customers reverse their payment transactions after the goods are already shipped.
Since transactions are irreversible in a decentralized payment system, it’s impossible for fraudsters to reverse a transaction.
2. Lower Transaction Charges
Digital payment processors like Stripe and PayPal charge up to 4% on transaction fees. Cryptocurrency processors charge as low as 1%.
So if you’re looking for a cheaper way to transact with your customers, you may want to start accepting cryptocurrency.
3. Instant Availability
With cryptocurrency, you don’t have to wait for your bank to process your payments. Once a customer approves a payment, the transacted amount immediately appears in your wallet and becomes available for other transactions.
4. Opportunity for Market Expansion
When combined with good marketing strategies, accepting cryptocurrency can help you expand your market horizons and drive online sales.
Traditional digital payment systems discourage international sales because consumers have to convert their currency to buy your goods or services. With a crypto payment system, customers from other countries can buy from your website without going through the hassle of converting currencies.
Cons of Crypto Pay
Reasons why you may not want to accept cryptos include:
1. Price Volatility
The value of cryptocurrency keeps fluctuating, making it risky for merchants to hold funds in crypto. For instance, there’s no guarantee that the value of Bitcoin in your merchant wallet will be worth the same dollar count a few months down the line.
But you can take advantage of cryptocurrency trading tools like a bot trade to monitor the values of different cryptos and stay on top of the game.
2. Crypto Payment Systems Are Capital Intensive
There are two main ways to set up a cryptocurrency payment system for your business. You can create a manual wallet for direct payment or use a third-party provider.
The first option is more difficult but offers better margins. Setting up a crypto payment system with third-party providers such as Coinbase and Bitpay is easier, but more expensive.
Should You Accept Cryptocurrencies for Your Business?
As with any business decision, the question of whether to accept crypto pay requires you to weigh the pros and cons. The factors mentioned above should help you make a good decision.
Found this read useful? Browse through our website for more insightful business advice.