Within less than 10 years, cryptocurrency has evolved from a shadowy world ruled by high-risk speculation and dark-web devotees to one of the hottest trends in both investment and business. And the technology behind digital currency, known as blockchain, is itself experiencing booming popularity.
Indeed, blockchain is heralded by some as the most significant technological advancement since the launch of the internet. Outside of its use as a decentralized currency, blockchain tech is already gaining ground in a diverse array of industries, including supply-chain management, digital IDs, voting, real estate, journalism, and many others.
Whether or not any of those blockchain applications achieve mainstream success, one thing is certain—cryptocurrencies like Bitcoin have revolutionized business payment processing. What’s more, the applications that allow businesses to accept cryptocurrency have advanced to the point where it’s now just as easy—if not easier—to accept cryptocurrency as it is to accept credit cards.
Here we’ve outlined some of the biggest benefits businesses can achieve by adding crypto as a payment option. Given how fast and far digital currency has advanced, all business owners should give this new technology serious consideration.
When businesses process credit card payments, the transaction not only involves the merchant and credit card company, but multiple other intermediaries, all of which charge some type of fee. Given this, typical credit card processing fees for businesses average 3%, but can run as high as 5%.
With cryptocurrency, however, the payment is routed directly from the sender to the receiver, eliminating all middlemen and dramatically lowering fees. Indeed, cryptocurrency fees generally run between zero and 1%, so by offering it as a payment option you can save significant money on each sale.
Whether made at the point of sale (POS) or online, credit card payments are a goldmine for frauds and hackers. These criminals steal customer’s personal information and use it for all kinds of nefarious purposes. And since they often lack the security resources of larger companies, small businesses are one of their favorite targets.
When making cryptocurrency payments, customers aren’t required to share any personal data—the payments are totally anonymous—so there isn’t any identifying data for hackers to steal. What’s more, some people greatly value their privacy, so they use cryptocurrency over other payment options simply because there’s no way to identify the purchaser.
In fact, a recent study of online shopping by Statista found that 17% of consumers decided not to make on online purchase due to security concerns, and another 18% failed to make a purchase because the company required too much personal data in its security check.
As when paying with cash, crypto transactions are final and cannot be contested by a customer. So with cryptocurrency, customers can’t claim they didn’t authorize the payment or are unhappy with your product or service, which can eliminate a significant risk of doing business when customers buy something from you and then dispute the payment with their credit card company.
What’s more, the blockchain technology verifies that funds are available before the transaction is complete, making it nearly impossible for customers to make a purchase without the funds in their account to cover it. And unlike most credit card processing services, there are no holdbacks. When someone pays with cryptocurrency, you receive all of the funds right away.
The internet allows companies to do business with anyone in the world who has a web connection, so even the smallest business can now sell their goods and services—or purchase their supplies and equipment—internationally.
Because cryptocurrency is completely decentralized with no government regulating it, business owners can avoid the hassles and expense that come with foreign currency transaction fees and exchange rates. Rather than going through the headache of accepting dozens of different foreign currencies, businesses now have a single form of currency that is welcome no matter where you live.
Outside of new foreign customers, businesses can also attract consumers who are die-hard fans of cryptocurrency. Indeed, there are a growing number of people, who specifically seek out businesses that accept digital currencies, and you can break into this expanding customer base.
By adding this new payment option, you can also gain a serious advantage over your competitors that don’t accept crypto—and force them to play catch-up with you down the road. And with more and more brands, financial firms, and institutions accepting digital currency every day, it’s only a matter of time before this payment option will be the rule, rather than the exception.
Whether incorporated into your POS systems in a brick-and mortar storefront or added to your website’s e-store, getting your business set up to start accepting cryptocurrency is now quite simple and inexpensive.
In the past, you had to be an IT genius to understand and implement the new technology, but these days, even your neighborhood lemonade stand can start accepting digital currency simply by adding one of many apps available for smartphones.
In a coming article, we’ll spotlight some of the most popular methods small businesses can use to accept crypto payments, but until then, a simple Google search for “cryptocurrency payment applications” will give you a headstart in seeing what’s out there.
Like any new development involving a business’ finances and income, cryptocurrency comes with several legal, tax, and security issues. So if you’re serious about adding digital currency as a payment option, first consult with us as your Creative Business Lawyer® to ensure you have all of your bases covered—and can achieve these benefits without any unnecessary risk.
We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule. Or, schedule online.