Image Source: Krypto Money
Blockchain technology and its application in powering cryptocurrencies is one of the biggest topics in tech, business, economics, and governance over the last couple of years. On the one part, some people believe that cryptocurrency, which is essentially decentralized money is a solution to some of the irresponsible monetary policies that governments tend to pursue. On the other hand, some people would argue that decentralized money free of government control might be a breeding ground for economic chaos.
Interestingly, startup founders, entrepreneurs, and business owners cannot afford to be sentimental. Business decisions must be guided by business logic – if the mainstream market warms up to the idea of cryptocurrencies as a means of exchange, businesses that took the initial leap to accept crypto will have a headstart over skeptical businesses. Of course, you might be worried about how to cash out cryptocurrencies, but first things first. This piece provides 5 insights into why businesses should start looking for ways to accept cryptocurrency payments.
- Immediate settlement
The first benefit of accepting cryptocurrency payments is that it enhances your cash position by providing immediate settlement. Whereas current payment gateways often wait some days (sometimes weeks) before they credit your bank account with funds, you can expect near instant deposits of cryptocurrency payments in your wallet. The increased settlement times helps you to have near-liquid cash that you can leverage to take advantage of business opportunities.
- Lower/zero transaction fees
One of the key selling points cryptocurrencies is that they offer significantly lower transactions costs than current payment processing systems. For instance PayPal charges 2.9% +$0.30 in fees per transaction for its flat-rate credit card processing fees while its interchange rate could go as high as 2% + $0.103 markup + a 1.8% interchange fee. Some other credit card processors could also charge significantly higher fees especially when cross border transactions are involved. However, with cryptocurrencies you only need to pay a small network fee and some emergent cryptocurrencies are already dangling the promise of zero transaction costs.
- Reduce chargeback fraud
The fact that cryptocurrencies are decentralized means that they do not have central payment processing and immediate settlement ensures that funds are deposited into your wallet after a successful sale. You don’t have to worry about chargeback fraud in which some fraudulent individuals will report their cards stolen after using such card to buy stuff from you. Once you’ve been paid for your goods/services, nobody can cancel or reverse the payment. In the event that someone’s wallet was compromised and their funds was spent at your store, you’ll technically not be liable and the wallet owner and wallet provider can wind a way to redress the situation.
- Access customers in global markets
Another key selling point of cryptocurrencies is the removal of cross-border barriers to trade by enabling people to send money irrespective of location without going through financial gatekeepers. By accepting cryptocurrency payments, you can easily offer your products and services to demographics can that are currently unserved or underserved by traditional financial institutions. Cryptocurrency will also enable you to sell in international markets without being bothered about currency exchange headwinds.
- Generate free positive buzz
Businesses spend a great deal of money on ads and marketing because can’t afford to fade into oblivion in the minds of their current and prospective customers. Soft promotion such as supporting sport teams, events, or celebrity ambassadors are strategic to generating positive buzz for businesses. Being among the first businesses in your industry to accept cryptocurrency payments could generate a great deal of positive buzz as cryptocurrencies continue to gain increased mass-market adoption. More so, accepting cryptocurrencies could help you attract a loyal band of customers who will see your business as a forward-thinking enabler of disruptive technology.