When bitcoin was first released in 2009 by Satoshi Nakamoto, it was shrouded in mystery. Many people questioned its legitimacy and refrained from investing in the digital currency. If someone from that year were to time travel to 2021, they’d be surprised to know that 1 Bitcoin is worth more than $46,000.
Does Bitcoin Deserve Your Attention?
The overall popularity of cryptocurrencies has skyrocketed in the last decade. It isn’t surprising considering that various celebrities and influencers have expressed their interest in cryptocurrency. Celebrity entrepreneur Elon Musk owns Bitcoin along with other cryptocurrencies as well. It has encouraged regular consumers to try their hands at bitcoin trading as well.As modern consumers warm up to the idea of cryptocurrency, businesses are faced with a crucial dilemma. Is it time for you to start accepting bitcoin payments from customers?
With established companies, including Tesla, Microsoft, AT&T, and Twitch, starting to accept bitcoin and other cryptocurrencies, it might seem like a good time to take the plunge. But the volatility of the cryptocurrency market will make small business owners skeptical.What kind of infrastructure do you need to accept bitcoin payments? How do you collect and store the payments you receive from customers? Is it safer to convert the collected payments into fiat currency? Is it possible to get scammed bitcoin back if your hard-earned cryptocurrency gets stolen?
These are just a few of the questions that’ll pop in your head when you think about accepting bitcoin payments from customers.In this blog, we’ll delve deeper into the pros and cons of accepting digital currency payments for small businesses. Let’s get started.
Bitcoin Payments: Evaluating the Good
Cryptocurrency transactions are based on blockchain technology. That makes them superior to traditional credit/debit card transactions in various aspects. Here are the key advantages of letting your customers make payments using bitcoin:
1. Speed & Convenience
The use of blockchain technology eliminates processing delays in bitcoin transactions. That means you can expect to receive instant payments irrespective of where your customers are located. Also, because these transactions use a public ledger, you can even let multiple customers pay together for a single order.
Moreover, most cryptocurrency payment processors charge lower processing fees per transaction than conventional payment gateways. It can go a long way to positively impact your company’s bottom line.
Bitcoins eliminate the need for customers to share their banking or credit card information on the internet. That means you don’t have to worry about hackers causing data breaches and revealing the personal information of customers. Also, using the right cryptocurrency exchanges and payment processes provides a secure infrastructure for processing transactions.
3. Seamless International Transactions
Another key benefit of accepting bitcoin is that it lets you accept payments from across the globe without worrying about foreign exchange rates and processing fees. It provides a unified framework for making payments that transcend international borders. It’s particularly useful if your business caters to customers from other countries.
4. Improved Conversions
The more diverse and flexible payment methods you offer to customers, the higher your chances of driving conversions. Also, the inclusion of bitcoin payments will help you cater to the younger generations, including millennials, who already have a preference for cryptocurrencies.So, if there are so many benefits of accepting bitcoin payments, why aren’t more businesses doing that already? Let’s find out.
Bitcoin Payments: Assessing the Risks
Apart from the extreme volatility of the cryptocurrency market, here are some other critical drawbacks associated with accepting bitcoin payments:
You need a bitcoin wallet to store the cryptocurrency you receive from customers. While these wallets maintain high security standards, they aren’t immune to cyberattacks. Similarly, cryptocurrency exchanges, such as CoinBase, could also fall prey to cyberattacks and scams.In such instances, you might end up losing all your earnings. Considering the anonymous nature of bitcoin transactions, it may not always be possible to recover bitcoin losses. If you want to get scammed bitcoin back, you’ll need the help of specialized cryptocurrency recovery services.
2. Illicit Customers
The confidentiality of bitcoin payments often makes it the choice of currency for outlaws, such as drug lords, scammers, criminals, etc. If you accept bitcoin payments on your website, you’ll need to find a way to verify the identity and legitimacy of your customers. Otherwise, your business could end up in unnecessary legal trouble.
3. Slow Adoption
While millennials are already investing and trading in bitcoins, older generations are still warming up to the idea of cryptocurrency. If your business caters to Gen X or baby boomers, offering bitcoin as a payment option can make them question the credibility of your organization and drive them away.
The Final Verdict
Before you bite the dust on accepting bitcoin payments, make sure you carefully evaluate the preferences of your target consumers. Also, use a secure hardware bitcoin wallet to collect your payments. Lastly, establish a framework for verifying customer identity and facilitating secure transactions.