5 Benefits in Accepting Crypto Payments for Businesses
Take a closer look and learn how accepting cryptocurrency payments can mutually benefit both businesses and their customers.
Cryptocurrencies have come a long way from being an emerging new type of asset, to being adopted by the mainstream society as an alternative medium of exchange.
As crypto becomes more adopted into mainstream society, governments are considering implementing cryptocurrencies as an alternative payment method. Some countries that have implemented crypto include Canada, United States, Australia, El Salavador, and parts of the European Union (EU)
This means that businesses have begun to offer crypto as an alternative payment method for their goods and/or services. While fiat, or regular currencies are still the most popular form of payment, the inclusion of crypto as payment provides both consumers and merchants with unique benefits.
Some of these benefits include simplicity, low fees, security and privacy, as well as greater control over their finances.
Continue reading to take a closer look at the 5 benefits in accepting cryptocurrency as payment method for businesses.
- Accepting cryptocurrencies provide mutual benefits for both businesses and their customers.
- Stablecoins are a type of cryptocurrency that have their values pegged to a fiat currency (such as the US Dollar), making them ideal and “stable” for daily transactions.
- Businesses can benefit from lower operational costs by accepting crypto, while customers can enjoy lower transaction fees and faster processing times.
New to crypto? Start here with our 101 guide on cryptocurrencies.
Cryptocurrencies are digital currencies that allow you to send and receive funds without using a bank or other financial institution.
Crypto can be used to pay for goods and services, or held for investment or speculation. The most popular cryptocurrency is Bitcoin (BTC), which was created in 2009 by an anonymous person or group known as Satoshi Nakamoto.
As a business owner, adding crypto as a payment method can simplify the transaction and settlement process for your customers.
With crypto, both parties no longer need to wait for the bank or payment gateway to settle the payment, the process happens in real time in the background via the blockchain network.
Additionally, crypto payments are sent directly from one wallet address to another – making the transaction peer-to-peer with no third parties involved.
You will not need to go through any banks or other financial institutions to process the payment, which makes it much simpler than traditional fiat currency payments.
Learn more about how to set up your wallet.
As briefly mentioned, crypto payments are processed through the blockchain network instead of relying on third parties like banks or credit card companies to process transactions for you.
This means that transactions can be completed and settled within minutes instead of days like traditional payment methods such as credit cards or checks.
The fees charged for processing cryptocurrency transactions are considerably lower compared to those charged when processing fiat currency transactions — in some cases, there may not be any fee at all depending on the crypto you use to pay!
This means that merchants who accept crypto payments can keep more of their profits instead of giving them away to banks and credit card companies who charge higher fees for accepting credit cards and debit cards as payment options compared to cryptocurrencies such as Bitcoin, Ethereum and Litecoin.
Meanwhile, customers enjoy lower transaction fees when compared to using their bank-issued cards or other payment gateways. It’s a win for both parties.
Heads up to the List of Businesses Accepting Cryptocurrency in New Zealand.
Security and Privacy
The blockchain provides a secure way of storing data without any central authority having control over it.
This means that if someone wants to use your information for purposes other than what you intend (such as identity theft), there is no one who can give them permission to do so because it’s decentralised and there is no central point of failure or control over it.
This also means that there is no single server or database where all this information lives. All nodes have access to everything at any given time so whenever someone tries to hack into one node they get nothing because all nodes are updated constantly with new blocks of data.
One of the biggest benefits of accepting cryptocurrency payments for your business is that it’s less risky than accepting credit cards because there are no chargebacks or fraud protection issues to worry about — unlike with credit cards, there’s no risk that someone will take back their purchase after they’ve already used it.
So, are there any risks when accepting crypto for payments?
Behind the many benefits that can be obtained through cryptocurrency in business. There are also risks that you should know and of course this is not to scare you. This is something you can prevent and you should know about it. Like the volatile crypto market and regulatory uncertainty.
Below are some considerations to keep in mind:
- The cryptocurrency market can be volatile. In some instances, there may be cases where the price of the crypto can fluctuate before or after the payment. However, this can be mitigated by transacting using stablecoins such as USDT, USDC, or TUSD.
- Some crypto networks such as Ethereum may experience congestion depending on the network activity, which can cause delays – but they are still arguably faster than delays in traditional banking networks.
- There are no laws or regulations in place yet regarding cryptocurrency payments, some countries have banned it while others still have no clear stance on it. This makes it hard for business owners to accept cryptocurrencies for their businesses because they don’t know how their country will react if they do so.
Also read: What Makes Crypto Volatile?
To sum it all up, cryptocurrencies have emerged as an attractive way for businesses to do business. It has provided the much-needed flexibility for businesses to be able to complete transactions quickly anywhere in the world without the involvement of any third party.
Apart from that, it has also revolutionised the way people shop online by providing them with a secure and anonymous option.
However, there are a few risks involved when you accept cryptocurrencies which need to be addressed before you make the decision of accepting cryptocurrency in your business.
Further reading: Explore our library of crypto investment topics on our Hub Site.
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Disclaimer: Information is current as at the date of publication. This is general information only and is not intended to be advice. Crypto is volatile, carries risk and the value can go up and down. Past performance is not an indicator of future returns. Please do your own research.
Last updated December 19, 2022