Once an obscure and strange new digital currency, cryptocurrency has become increasingly mainstream with almost a cult following worldwide.
Bitcoin, the first cryptocurrency that started it all, is now accepted as payment by major companies such as PayPal, Microsoft, Starbucks, Etsy, Whole Foods, and Newegg, just to name a few.
Cryptocurrency is still considered an undiscovered digital country of sorts, with the implications of its acceptance not entirely known or explored. What is known is that there are many benefits for businesses that accept cryptocurrency as payment. Let’s dive in and explore a few.
Why Accept Cryptocurrency As Payment?
As the number of cryptocurrency users continues to grow globally and more major corporations are beginning to accept them as a form of payment, it might make sense to incorporate them into your website.
Not convinced? Let’s take a look at some benefits of accepting cryptocurrency as payment on your e-Commerce website.
1. Transaction fees are considerably lower
Every business wants to ensure that its costs are kept to a minimum, especially when it comes to processing payments. Credit card transactions are notorious for having high fees. As much as 3-5% for every transaction.
However, when it comes to transactions with crypto, it’s an entirely different scenario. Fees are only at a mere 1%.
2. Broader customer base
The success of a business greatly depends on the number of customers it is able to reach. With cryptocurrencies, you can reach people all over the world. Certain credit card companies and other payment systems do not service certain regions of the world.
By accepting cryptocurrency, you open up the opportunity for new customers, that does rely on this digital currency, to purchase your services. There are no limitations on cryptocurrency transactions at the international level since there is no control by either a country or a government. They are transactions that are strictly between the crypto user and the online merchant.
3. All transactions are final
Crypto transactions are virtually impossible to reverse or cancel. The main reason for this is that there is no central body. The result of that is that both the buyer and the seller have the same amount of power.
In a “decentralized system”, the transaction occurs, with consent, between the buyer and the seller. If there is an error in the transaction, there is no way for it to be refunded, until the buyer confirms it.
4. Transactions are more secure
The way blockchain technology is set up is that it allows users to not only share but store cryptocurrency securely. The blockchain is essentially a “secure online ledger” that maintains a record of each transaction made. For every payment transaction that is carried out, an entry is entered directly onto the blockchain.
What Are The Drawbacks To Accepting Cryptocurrency As Payment?
Cryptocurrency use has been the subject of controversy since its introduction, more than a decade ago. Although the number of crypto users has increased steadily worldwide, there are still many businesses that are skeptical about adopting them as another payment method. Let’s look at the most common limitations that crypto use has:
If there is one aspect that keeps most investors, users, and businesses from fully adopting crypto use are its price volatility. The price increases and drops are so extreme, that it is virtually impossible to manage your cash flow.
What drives this extreme volatility are several factors: investor and user attitude, supply and demand, government regulations, and media publicity.
You would think that, since cryptocurrency is not controlled by any government, there would be no requirement to pay taxes, right? Think again.
The IRS actually requires you to report all transactions made using cryptocurrency. All revenues and any losses concerning your “property” also need to be reported. Don’t forget to also provide the “fair market value” of all cryptocurrencies in U.S. dollars.
3. Customer service challenges
Although accepting crypto will open your virtual doors to accept new customers, this influx may also create unforeseen challenges. Expect a higher than usual volume of questions as to how this payment system actually works.
Your customer service support team may feel the pressure to adapt to the steep learning curve that crypto requires. It is best to prepare in advance and offer specialized training to ensure a smooth transition.
How To Incorporate Cryptocurrency Payments Within Your e-Commerce Website
Although the idea of accepting cryptocurrency as payment may seem far-fetched to many e-Commerce merchants, it is a very real, viable option.
One of the easiest ways that e-Commerce merchants can begin accepting and processing cryptocurrency payments is by partnering up with a payment processor that accepts crypto as a form of payment.
On the website, the product will be listed using fiat currency. When a customer chooses to pay with cryptocurrency, the price will be converted into the “equivalent crypto value”. The payment is processed via a payment gateway. How it differs from a regular transaction is that it is permanently recorded on the blockchain.
What this entails is that the record will remain, irreversibly, recorded in a ledger. This is a great advantage for both merchants and buyers who wish to hold on to permanent records of all transactions, eliminating the need for paper receipts.
Ready To Accept Crypto As Payment?
When it comes to running an e-Commerce establishment, you can’t go wrong with accepting crypto as payment. Thanks to blockchain technology, crypto payments are fast, simple, and safe. Plus, it offers consumers a very secure and convenient way to pay online.
By adopting cryptocurrency as a payment method, you are demonstrating to current and future customers that you are an innovative, forward-thinking company. If you are ready to expand your online operation and boost your revenue, then you can’t go wrong in accepting cryptocurrency as payment.