The adoption of cryptocurrency continues to grow in 2019 along with an increasing number of institutional investors. A recent study from the Global Custodian found that 94% of endowments include crypto-related investments. Among those, 50% reported an intention to increase their position over the next 12 months.
As cryptocurrency continues to march towards mainstream adoption, more businesses are considering accepting Bitcoin and other cryptocurrencies as payment.
Should your startup accept cryptocurrency? What are the benefits?
Quick Transaction Processing
Cryptocurrency transactions process very quickly. In many cases, transactions process in real-time or within just a few minutes.
Traditional payment processing takes longer because they have to go through the bank, which slows down the process.
With nearly-instant processing, you no longer have to wait for funds to be available in your bank account.
Because cryptocurrencies are decentralized, there’s no need to wait for banks to verify every transaction, nor are there any fees associated with transactions. You may have to pay a flat fee for a merchant wallet, but this fee is negligible compared to the fees paid for processing credit and debit cards.
As a business, you can also use a bitcoin exchange to convert cryptocurrency to fiat currency.
Over the years, U.S. businesses have paid tens of billions of dollars in credit and debit card processing fees. Accepting cryptocurrencies will eliminate these fees, saving your business 2-5% on every transaction.
Give Customers More Options
Accepting cryptocurrency gives your customers more options when it comes to payments. When you limit payment options for customers, they’re more likely to go somewhere else.
The more payment options you offer, the more likely your business will appeal to a wider range of customers.
A survey from Skrill found that 28% of shopping carts are abandoned due to a lack of the payment option the customer wanted to use.
Avoid Fraudulent Chargebacks
Cryptocurrency is the digital equivalent of cash. You either have the funds, or you don’t. All transactions are final when using cryptocurrency because every transaction is added to the blockchain through mining.
The blockchain system verifies the customer’s funds and makes it virtually impossible for them to spend more than they own. Because both parties have to approve each transaction, there are no disputes. Chargebacks become a thing of the past.
Traditional credit card transactions are also more prone to identity theft. Cryptocurrency payments are supported on a blockchain platform, which has multiple levels of encryption to ensure that funds are safe.
Expand Your Customer Base
Cryptocurrency advocates may flock to your brand simply because you accept cryptocurrency payments. In fact, you can find online directories which list businesses that accept bitcoin and other cryptocurrencies. Your business may find its way onto these lists, which could push more traffic to your website and expand your customer base.
As cryptocurrency continues to become more widely adopted, your business will continue to expand its customer base and stay ahead of the competition.
Because cryptocurrency is international, it is accepted worldwide. When you accept bitcoin and other cryptocurrency, you avoid expensive transaction fees and exchange rates.
In most cases, startups can benefit from accepting cryptocurrency payments. There are benefits and drawbacks to accepting this form of payment, and these have to be weighed carefully before making a final decision. However, cryptocurrencies are not likely to disappear anytime soon, and giving customers more payment options will only provide benefits.