What are the benefits of accepting cryptocurrency payments for your business?
Are customers interested in paying with cryptocurrency in 2023?
Even though numerous companies have already begun to accept cryptocurrency as a legitimate form of payment, research conducted by Crypto.com reveals a massive discrepancy between customer demand and merchant acceptance of crypto payments.
This recent study, which included 110,000 customers and more than 1.5 million Worldpay merchants, revealed that only 4% of the surveyed merchants accept crypto payments, despite 60% expressing interest in this option. On the other hand, 40% of the surveyed customers already use digital assets.
This immense gap between crypto-friendly customers and merchants who transact in digital coins has caused 64% of Crypto.com’s users to resort to prepaid cards for spending their assets at places that do not accept cryptocurrencies as a form of payment. This clearly illustrates the strong demand for broader acceptance of cryptocurrency payments.
This research implies a vast potential for all businesses worldwide, particularly in the travel, automotive, digital media, and hospitality sectors, where need and disparity are most pronounced, as per the study.
The popularity of cryptocurrency payments among consumers is undoubtedly compelling for businesses to consider allowing crypto as a payment option, but it is far from the only incentive.
In our opinion crypto has many perks to offer both for the business owners and their customers, which is why it is a no brainer to extend the use of crypto for acquiring everyday items. Crypto payments have now become so much easier due to the emerging numbers of payment gateways available on the market. That’s why we highly advise those merchants who’d like to start accepting cryptocurrency payments to first discuss their questions with a professional crypto consultant.
What are the benefits of cryptocurrency for businesses?
The one thing business owners should be really good at is satisfying their customers’ needs. Researching the preferences of your target audience is key to providing the best possible service at your establishment, regardless of its physical or digital presence. The rising popularity of cryptocurrencies is yet another factor to consider when approaching new clientele.
Faster payment process
People desire promptness in all aspects of their lives. We seek swift transactions, from clicking the “buy now” button to tapping our phones’ side buttons. We want to make purchases quickly and receive items without delay. Cryptocurrency eliminates a layer of processing time affecting customers and the supply chain. This transaction can be conducted without any difficulty by providing instantaneous and precise information regarding the customer as well as the supply chain, along with visibility into your stock.
No need for costly currency conversions
If your company is involved in international transactions, dealing with cross-border payments through multiple banks and accounts can be challenging, especially when currency conversion is required. This can lead to delays and added costs, making the process even more complicated.
In contrast, making or receiving payments in digital currency does not require any conversion between different currencies. Furthermore, it is much less hassle than dealing with foreign exchange rates and processes associated with conventional money.
In some instances, the convenience offered by cryptocurrencies can be even more appreciated when considering that it may not be the most pertinent benefit for many companies.
Take advantage of lower transaction fees
If you have ever employed a credit card or a PayPal account to manage payments on your website, you are likely aware of the related charges. For instance, both credit cards and PayPal usually levy around 3% for each transaction. The expenses associated with processing credit card fees can be pretty costly, particularly for the merchants themselves.
Establishing a system for accepting cryptocurrency does require some initial expenditure. Nevertheless, once everything is set up, the expenses of managing crypto payments are much lower than those associated with credit card transactions. Additionally, cryptocurrency can reduce or even remove the necessity to accept foreign currencies or offer a multi-currency choice.
Eliminate swindling chargebacks
Managing chargebacks – which are customer-initiated conflicts concerning credit card payments – can be highly demanding and lead to considerable income loss for businesses. Unfortunately, merchants suffer billions of dollars in costs related to chargebacks every year. A Mastercard study indicated that the amount of chargebacks lodged in the United States is projected to reach 409 million by 2023. As a bank or other financial organization does not manage cryptocurrencies, there is no entity to which the cardholder can submit an appeal for reversing the transaction. Customers must present their grievances directly to the merchant, if they desire a reimbursement.
Dealing with fraudulent chargebacks is a troublesome task. Yet, it is essential as any uncontested chargeback can result in a hefty penalty from the bank and the entire proceeds of a sale being lost. Furthermore, if a merchant has an excessive number of chargebacks relative to their total orders, then their business will start flunking.
Research indicates that card issuers generally prefer to side with customers instead of retailers. To be more specific, the former is favored five times as often, a fact which is highly disheartening for vendors given how laborious and challenging these are. Regrettably, merchants rarely succeed in their chargeback disputes.
The great news is that cryptocurrencies have rendered fraudulent chargebacks a thing of the past – it is impossible to access cryptocurrency wallets without their owner’s authorization. Even if this payment method is utilized as an auxiliary payment method, it can still significantly diminish the risks as mentioned above.
Attract more new and wealthier customers
According to a study conducted by Forrester Consulting on BitPay customers, 40% of those who opt for cryptocurrency payment are new to the merchant. Furthermore, blockchain-friendly customers have been observed to spend twice as much money compared to those paying with credit cards, and they are more likely to return, if the merchant accepts their digital currency payment.
It is particularly pertinent for businesses that serve a demographic of informed males below the age of 34 – taking crypto payments is an obvious choice as they possess the majority of decentralized wealth around the world.
Permitting them to expend that riches at your business could dramatically augment the total sales and income, leading us to the following contention.
Use crypto as a marketing tool
As more and more customers are drawn to your business due to its acceptance of specific cryptocurrencies, a few promising marketing prospects may arise.
By offering customers the option to pay with cryptocurrency, businesses can gain an edge in the burgeoning early adopter market and tap into a new demographic that is only growing. You can collaborate with your payment processor to expand your reach to crypto-savvy online shoppers. If you take advantage of this opportunity, it will provide a return soon rather than at some point down the line.
Have control over your money
Cryptography provides individuals and businesses with a sense of ownership over their finances. When you receive payment in the form of cryptocurrency, it is up to you whether you would like to keep it stored on the blockchain or exchange it for traditional fiat currency through third-party payment processors upon completion of the transaction.
It is essential to recognize that while it may be relatively straightforward to accept Bitcoin payments independently, attempting to manage multiple cryptocurrencies without external assistance can quickly become a complex and taxing task.
The primary motivation for most businesses not to create their cryptocurrency payment systems is that they either don’t bother with it or collaborate with other companies that can provide them with a level of flexibility beyond what they had imagined.
Higher level of security
Cryptocurrency derives its moniker from cryptography, a practice of encrypting sensitive data and private keys. These private keys are given to the currency holders as proof of ownership and access to their blockchain. To make payments using cryptocurrency, customers simply choose their digital wallet and authorize the payment.
Cryptographic methods are deemed to be more secure than payments made with credit or debit cards, as they do not require third-party validation. When a customer pays using cryptocurrency, their details are not kept in a centralized location which is prone to data breaches. The blockchain ledger is utilized to confirm and document each transaction, making it extremely difficult, if possible, to swipe someone’s identity.
Convenient and affordable implementation
Payment gateways that facilitate cryptocurrency processing can be quickly incorporated into e-commerce platforms, point-of-sale systems, hosted online checkout forms, billing or accounting software, and a lot more. These straightforward, all-inclusive integrations allow convenient settlement and documentation of all transactions.
Immediate cash flow
In contrast to the usual credit card or ACH funding process, which can take several days, cryptocurrency payments are promptly transmitted when the transaction is processed. This gives merchants more rapid access to resources and a consistent cash flow.
Many merchants who are looking to incorporate cryptocurrency into their payment systems are worried about the market volatility that could affect their funded transactions. To address this issue and protect against price instability, various crypto payment gateways can convert cryptocurrency payments into fiat currency for immediate and dependable payouts. Merchants can rely on consistent financing and reduce the risks linked to market value changes. Furthermore, this creates a more reliable safeguard against inflation.
In the modern digital age, businesses have no limitations when selling their products and services to customers worldwide. However, several obstacles can hamper this process, with the substantial cost of payment processing being one of the most prominent ones.
Cryptocurrencies enable global commerce without the need to sacrifice a large portion of one’s earnings or charge exorbitant prices for goods. It is noteworthy that Bitcoin has an identical value wherever it is used, and by eliminating intermediaries, transactions are both faster and more economical.
Hassle-free Mobile Payments
As companies strive to make their websites more compatible with mobile devices, an increasing number of transactions are being conducted on people’s cell phones.
Cryptocurrencies offer users the ability to make mobile payments faster, more securely, and more straightforward due to their decentralized structure.
The matter of cyber security remains a significant drawback of digitalization. Every year reports surface regarding serious data breaches that can lead to identity theft and financial loss. Cryptocurrency transactions offer great anonymity as users are able to determine the quantity and type of information they wish to share. Providing cryptocurrency as an alternative payment method can appeal to potential customers who prioritize their data security.
Overcome local regulations
If you operate a business which is available for people from all over the globe, then it’s very important to consider the different laws and restrictions regarding international trade. Crypto allows customers to make reliable payments without worrying about locally imposed taxes.
Approaching new markets and demographics
It is estimated that two billion individuals worldwide lack access to traditional banking services. In the United States, approximately seven percent of adults are unbanked. Cryptocurrencies provide an alternative solution, allowing everyone with an internet connection to become financially included. Rather than simply democratizing currency, Bitcoin allows businesses to reach out to burgeoning markets and make their products available to a broader range of people. This leads to an increase in customers, which subsequently creates more opportunities for sales.
Businesses which are accepting cryptocurrency payments
Shopify and Etsy allow individuals to create their own digital stores on their respective platforms and accept Bitcoin as a form of payment.
NordVPN and ExpressVPN both accept Bitcoin payments through the BitPay application.
The Microsoft Store offers the ability to purchase applications and Xbox games utilizing Bitcoin.
Twitch, the most renowned streaming platform, now allows Bitcoin as a payment method, meaning you can show appreciation for your favorite streamers by donating BTC to them
How to start accepting crypto payments as a merchant?
If you choose to proceed and begin accepting cryptocurrency, there are a few steps that must be taken. Generally speaking, the process is comparable to setting up a credit card processing service.
It is essential to determine whether you would prefer to have a processor handle payments or if you wish to manage them yourself. Utilizing a processor will make the process easier; you can register with an organization such as BitPay or PayPal to begin accepting payments.
Rather than accepting payments in cryptocurrency manually, the process is more complex. You will need to create an account on a crypto exchange platform like Coinbase for customers to send you their payment. Additionally, you can incorporate features into your website, such as a QR code that allows customers to transfer crypto to your exchange account.
Finally, you must take action to remove your cryptocurrency from your trading platform, either by transferring it to a wallet or exchanging it for currency and sending the money to your business banking account.
What to consider before starting to accept payments in crypto?
First, you have to decide whether you want to integrate a certain payment gateway, which would manage all financial dealings or you prefer to be the one in charge of that. Choosing the right gateway provider and the proper crypto wallet is salient to the success of any crypto payment process. You must also have a clear vision about the way you wish to proceed with the earned crypto and establish a sustainable strategy, which would fulfil your needs. If you don’t want to be a crypto holder, then there’s always the option of instant conversion to fiat currencies.
It is essential to be mindful of the regulations if you are looking to establish a lasting cryptocurrency system. It would help if you took caution regarding both short-term and long-term holdings and any applicable regulatory and compliance laws in your country. Any efforts you undertake now to adhere to the regulations will pay off in the long run by reducing the need for expensive consultations with legal and financial professionals. This includes meeting anti-money laundering (AML) and know-your-customer (KYC) standards, and filing taxes correctly, as well.
The more every individual or institution learns about crypto, the better it would be for all who wish to gain a certain level of financial freedom. Open-minded business owners should always be up-to-date with the current trends both in marketing and finance. Implementing crypto as a form of payment is beneficial for all parties which would like to narrow down additional costs and make the most out of their assets. And although it all may seem way too good to be true, there’s always a way out if you’re not certain about proceeding with the provision of this payment option.
Zornitsa is the Editor-in-chief at Coinlabz. She is involved in researching the impact of blockchain technology and the way crypto is transforming peoples’ perceptions of finances.