The turbulent nature of cryptocurrencies has left many people wondering whether investing in Bitcoin is worth it or not.
Between its crazy upswings and unexpected price drops, the digital currency has managed to gain worldwide recognition, leading cryptocurrencies into mainstream adoption.
For many speculators, however, worldwide adoption of Bitcoin can only happen if merchants start to use it as a payment method for their products and services.
But is it a good idea for merchants to start accepting Bitcoin? How will their business have to adjust to this revolutionary change in payments?
In this article, we outline the most important things merchants should know about accepting Bitcoin payments.
Using Bitcoin as a payment method
Until now, small business owners as well as larger companies, have not been able to see how Bitcoin could fit into their business model.
Sure, crypto payments are fast, safe and completely decentralized but what about the issues that arise with its volatility?
Bitcoin initially started as an experiment, used to buy and sell products that, in some cases, were illegal. But in 2019, things have changed.
Right now, Bitcoin has regulatory oversight and can be used just as conveniently as if you’d pay with cash.
And while it is unlikely for its volatility to “calm down” any time soon, the network keeps improving in its effort to compete and hopefully replace traditional financial systems.
Having said that, there are several points we should touch upon when it comes to accepting Bitcoin payments.
Why business owners should accept Bitcoin payments
Here are 9 advantages of using Bitcoin as a payment method for your business:
- The Bitcoin network is completely transparent. This means that everyone can see his/her proof of payment on the blockchain, eliminating the need to cut receipts. Therefore, paying in Bitcoin does not only increase customers’ trust but also a business’s eco-friendliness.
- Sending money overseas is cheaper and faster than traditional bank payments. This, in many occasions, can cause delays in invoice payments as well as issues with a company’s cash flow.
- Bitcoin can only be sent with its owner’s permission. Currently, there are many subscription services that seem unreliable due to additional permissionless payments that are made without the customer’s awareness. Using Bitcoin as a payment method will, therefore, help subscription-based services become “risk-free”.
- Accepting BTC eliminates the opportunity of fraudulent chargebacks since, once the coins leave the customer’s wallet, there is no way to claim them back. Especially for online businesses, this is a great benefit to consider.
- Bitcoins can be used to pay for goods and services both online and on the spot. This makes it less difficult for individuals to get used to the new payment concept. Customers simply buy Bitcoin and use it for payments, just like they would with FIAT currencies.
- In contrast with traditional currencies, Bitcoin is designed to be a deflationary currency, which, in time, increases its scarcity and value. While there is not proof of the currency’s future growth, many businesses see this as an exciting opportunity to further increase their capital.
- One of Bitcoin’s most important features for merchants is its multi-signature authorization. In simple terms, this means that in order to complete a transaction, several people will have to sign off the payment.
- Bitcoin is the most popular cryptocurrency and it’s already accepted by many retailers due to its brand recognition and liquidity.
- With the introduction of the Lightning network, the fees required to make a Bitcoin transaction have become minimal. As a result, micro-purchases such as a cup of coffee or daily groceries can now be made with practically zero fees.
What business owners should keep in mind
There are a few points that business owners need to keep in mind when it comes to accepting Bitcoin payments.
Of course, these precautions heavily depend on the merchant’s location as well as the audience they are targeting.
Thus, here are 5 things you may want to keep in mind regarding Bitcoin payments:
- Regulatory oversight is minimal when it comes to the currency’s price. If Bitcoin’s value decreases, there is no third party that can cover your losses.
- Bitcoin payments, at this moment, can only be completed with a reliable internet connection. This can be a problem in remote locations, where there is no internet connection.
- Merchants need to keep in mind that, as Bitcoin is still in development, the speed of transactions and the fees may vary depending on mining efficiency and the congestion of the network.
- If a business decides to convert its Bitcoin into FIAT currency, they will need to find a reliable exchange with low fees and fast transactions.
- If you run a brick-and-mortar shop, employees will have to understand the Bitcoin ecosystem. And, depending on the industry and type of business, this may require additional training.
So, should your store accept Bitcoin payments?
The answer depends on your business and how well you can handle receiving a highly volatile currency as a form of payment.
As you can see above, there are both benefits and drawbacks when it comes to accepting Bitcoin as a payment method.
However, when looking in the long term, what may now seem like a problem is really a masked opportunity to improve the cryptocurrency space.
And because mainstream adoption is already underway, creative blockchain entrepreneurs are already coming up with solutions to address current shortcomings of the digital currency.
So, with that in mind, we believe that Bitcoin payments will soon become a norm and more people will use this method to complete online and offline purchases.
If you have a business and think about adding Bitcoin as a payment method, we hope you found this article valuable. We recommend that you perform additional research to find out more about your country’s regulatory measures when it comes to cryptocurrency payments.
Furthermore, we would love to know if you already accept Bitcoin payments? Feel free to let us know in the comments below!