What Every Business Should Know About Cryptocurrency
8 months ago
Have you heard of cryptocurrency or bitcoins?
If you haven’t, you should learn more about this form of payment that many analysts are predicting will change the future of finance forever.
Here is what every business should know:
What is a bitcoin?
Bitcoin is a digital currency (also called crypto-currency) that is not backed by any country's central bank or government. This form of payment first came into use in 2009 and has been growing in popularity due to its ease of international use. In the past eight months alone, the industry has grown over 350% to be over a 150 billion dollar industry.
How can consumers use Cryptocurrency?
For the average person using cryptocurrency is as easy as:
- Get a digital wallet to store the currency.
- Use the wallet to create unique “public addresses” to receive currency.
- Transfer funds in or out of your wallet using public addresses.
What is a cryptocurrency public address? A public address is a unique string of characters used to receive cryptocurrency. Each public address has a matching private address that can be used to prove ownership of the public address. With Bitcoin the address is called a Bitcoin address. Think of it like a unique email address that people can send currency to as opposed to emails.
How do businesses accept cryptocurrency?
Accepting payments in cryptocurrency merely requires you to have ecommerce software capable of handling virtual currency, such as our MarketingWebsite.com software.
What are the benefits of accepting cryptocurrency?
1. Beat the competition.
Millions of consumers have cryptocurrency to spend, but few businesses are ready to begin accepting this increasingly popular currency. By accepting bitcoins, you will be one of the first in the game for what is being called “the future” of spending.
2. A valuable investment.
The swift and unarguable jump in value of cryptocurrency like bitcoins means companies holding the currency have seen a huge increase in their investment in a very short time. We’ve experienced this first hand ourselves since we began accepting bitcoins from our clients several months ago, and it is exciting.
3. Lower transaction fees.
Processing fees can be a huge expense for small businesses. Accepting cryptocurrency can go a long way to help mitigate the sting. By general rule, cryptocurrency has lower per transaction fees than accepting credit cards and debit cards.
With credit and debit, the typical transaction fee is at least 3 percent plus multiple hidden fees. Meanwhile, with cryptocurrency like Bitcoin, it is said that merchants can reduce their fees to less than one percent.
4. Better fraud protection.
Security and protection of personal information is a huge concern for consumers and businesses alike. With cryptocurrency, clients and customers don’t need to provide personal financial information, therefore removing that as a concern. This works in a way similar to PayPal, which is a third party between the consumer and merchant as an extra layer of protection. Here, the third party would be sending and receiving cryptocurrency like Bitcoin.
As shopping continues to move more and more online, having a more secure way to run transactions will be crucial for small businesses.
5. You get the money faster.
When accepting credit and debit card payments, business owners may not see that money for a while. Because of all the third parties involved, and because they all have different rules, it could be anywhere from a couple of days to an entire week before they see the money hit their bank account. This can be incredibly frustrating when you need cash flow, have bills to pay and need to make payroll. That doesn't even take into account the headaches of dealing with charge-backs.
The good news is this usually isn’t the case with cryptocurrency, as there isn't a middleman of a merchant processor or bank to deal with. This means business owners can have faster access to cash so they can keep their business running, and once a bitcoin transfer is made, there is no charge-back.
6. Cryptocurrency eases foreign payments.
Currency exchange and foreign transaction fees are an accounting nightmare, making it more challenging for small businesses to sell on a global scale. It can also get rather expensive. While some intermediaries like PayPal have tried to alleviate this, you’re still looking at a 3.9% fee to accept foreign payments.
This is another area in which cryptocurrency is solving a problem for business owners. Because cryptocurrency like Bitcoin has no middleman and isn’t based on any country’s bank system, it removes this headache from the equation. This makes it easier for merchants to expand beyond their own borders without having to worry about the costly consequences. There’s no comparison between $0 and a 3.9% fee.
If you're a small business considering selling internationally or looking to stand out from the competition, accepting bitcoins or other cryptocurrency might be the answer. We would love to talk more with you about cryptocurrency and how you can begin accepting it from your ecommerce shopping cart. Contact us and we will be happy to answer all your questions.