Bitcoin, Ethereum, and Dogecoin have all entered our global lexicon, and digital currencies that were once associated with shady, anonymous transactions have now gone mainstream. Bitcoin alone accounts for approximately $6 billion in daily transactions, and while some regard cryptocurrencies as a financial asset rather than currency, an increasing number of businesses are accepting it as a form of payment. So, in order to avoid falling behind, do you need to start Accepting Cryptocurrency Payments for your business? Here are the pros and cons of accepting cryptocurrency as a form of payment and hope it will help you find an answer.
Pros of Accepting Cryptocurrency as payment:
- Customer Loyalty:
Few concepts, currencies, or financial instruments have a more devoted online following than cryptocurrencies. Derivatives and stock options don’t typically pique the interest of millions of young men and women, causing them to consume an ungodly number of white papers, blog posts, and YouTube videos, but cryptocurrency does. While it is true that the fervour is largely due to the perception that crypto is a quick way to make money, that doesn’t mean businesses can’t capitalise on it.
- Lower Transaction fee:
Whereas banks and credit card companies typically charge high transaction fees ranging from 1.3 to 3.5 per cent (not including the payment processor’s fee), cryptocurrency transactions frequently do not have fees, and if they do, they can be as low as 1%. A small percentage point change like that could have a significant impact on your bottom line on a large scale. When you convert your traditional credit card sales to cryptocurrency sales, the savings would be enormous and these savings could be passed on to your customers in the form of discounts, this will play a huge role in driving sales even further. However, while there are savings to be had at the point of purchase, if you do not do your homework, you may be stung when it comes time to convert your Bitcoin into fiat currency. With rates generally high and transaction fees frequently involved, you may lose all of your savings when converting your crypto to fiat.
- Tapping into the unbanked market:
This positive aspect is self-evident. Increasing the number of payment options available to your business will only increase the number of customers who can purchase your products. Accepting cryptocurrency will not only attract crypto evangelists and those who are hesitant to give their information to a credit card company; you will also be opening your store to the world’s sizable unbanked population. Accepting cryptocurrency payments will allow you to tap into those markets, which are sizable given that there are an estimated 1.7 billion unbanked people worldwide.
Cons of Accepting Cryptocurrency as payment:
Unfortunately for all those enthusiasts, there is a growing fear that cryptocurrencies have had their days. Governments around the world are cracking down on cryptocurrencies for a variety of reasons, including their environmental impact due to the massive amount of computing power and thus electricity required to keep the networks running, as well as the lack of state oversight over decentralised currencies. In May, the Chinese government banned cryptocurrency transactions, and many provinces have also prohibited cryptocurrency mining, which is the process of solving mathematical equations using computing power to generate new units of currency. Several governments, including China, are developing their own virtual currencies, backed by central banks, in an attempt to supersede cryptocurrencies beyond the control of financial regulators.
Even if you last checked the dollar-euro exchange rate a few months ago, you could probably make a good guess as to what it is today. Not so with cryptocurrency. With such large fluctuations in value occurring on a regular basis, merchants are at risk of being hit in the pocket if they are not cautious. Volatility makes pricing products difficult, and it can make dealing with returns of crypto-purchased items even more difficult.
- Non-Universal appeal:
Despite the phenomenal growth in cryptocurrency adoption and diversification opportunities, it must be stated that cryptocurrencies are far from ubiquitous. While the barrier to entry is decreasing, acquiring cryptocurrencies and purchasing products with them still necessitates a higher level of technological knowledge. Then there’s the fact that there are a plethora of cryptocurrencies to choose from for customers and merchants, with thousands of new coins entering the market in the first half of this year. You could spend a lot of time and money accepting payments for one coin only to discover that its popularity has plummeted in favour of the next big thing.
Ultimately, whether or not you Accept Cryptocurrency as a Payment Method for your business will be determined by one factor: your customers. Even if your customers are willing to pay you in bitcoin or another cryptocurrency, you must have a strong crypto payment gateway in place. Doji Pay is a company that can provide your company with a payment gateway, making it easy for you and your customers to conduct business with cryptocurrency.