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How Does a Business Work with Cryptocurrency?

With over 2300 businesses in the U.S accepting payments through Bitcoin and more companies worldwide accepting bitcoin and other digital assets, cryptocurrency is slowly being accepted in the financial world. If you are among the early adopters of emerging digital trends, you might be wondering how you can accept cryptocurrency as payment for goods and services in your business.

However, is the use of cryptocurrency right for small and medium-sized businesses? While it may have worked excellently for one business, especially best uk online casinos, it doesn’t mean that it is suitable for your business. Even though there is no module guiding what businesses accept cryptocurrency, you should consider several factors before doing business with cryptocurrency.

What is Cryptocurrency?

Cryptocurrency is basically a digital currency that uses Blockchain technology for exchange for business goods and services. Most companies have their currencies called tokens that can be traded for goods and services provided by the business. Simply put, digital currency is like arcade tokens or casino chips that can be bought using real currencies.

Using a cryptocurrency eliminates middlemen in a business transaction. For instance, instead of storing your money and depending on a bank to safeguard it, you simply keep your encryption key. This gives users peace of mind as it is more secure, eliminating data breaches.

If you are not sure which companies accept cryptocurrency, small, medium, and large businesses can use this digital currency. However, make sure that you understand how it works before listing your business in cryptocurrency.

What Major Companies Accept Cryptocurrency?

If you are looking for some inspiration before integrating this payment model into your business, below are some top companies that accept cryptocurrencies:

  • Microsoft
  • PayPal
  • Whole foods
  • Home Depot
  • Overstock
  • Etsy
  • Starbucks
  • Rakuten
  • Twitch

Benefits of Accepting Cryptocurrency in Your Business

Running your business using cryptocurrency has several benefits. They include:

  • Reduces transaction fees. Incorporating cryptocurrency into your business ideas significantly reduces the transaction fees since there are no intermediaries. Just to mention, small businesses using credit cards often incur 25 cents for every swipe and 2-4% transaction fee. These costs may add up to significant amounts over time. Saving transaction costs is among the many ways you can use cryptocurrency for business development.
  • Better merchant protection. Any business accepting cryptocurrency also benefits from crypto’s decentralized nature. Businesses are protected from fraudulent chargebacks since transactions are final and cannot be reversed.
  • Increased sales. Being a digital currency, cryptocurrency is a worldwide currency and can open up your business to international buyers. For instance, an electronic buyer recently sold over $300,000 worth of electronics to more than 40 countries by accepting payment through cryptocurrency.
  • Caters to customer preferences. Accepting to be paid through cryptocurrency provides an opportunity for customers to shop from your business while protecting their personal information.
  • You access money faster. Accessing payments made through credit and debit cards often takes some days or weeks, which isn’t the case with cryptocurrencies. You can access your money immediately after the payment is completed.

Risk of Accepting Cryptocurrency

Using cryptocurrency for business payments come with the following drawbacks:

  • Technical barriers. Accepting to use digital currencies means that you should set up a digital wallet, which might be challenging for business owners who lag technologically. Generally, the realm of cryptocurrencies has a lot of information with a steep learning curve.
  • Volatility. Price volatility is probably the highest risk of these digital currencies to any business. Their values are highly unpredictable. For instance, Bitcoin was initially valued in cents in 2009 when it was first introduced, rose to $19172 in 2017, and currently at $478.97.
  • Security issues. Even though crypto transactions eliminate potential cyber threats, such as infiltrated credit card numbers, the currency isn’t 100% safe in the current world of escalating cyberattacks. Fortunately, you take some steps to protect your business wallet, such as using secure private keys, two-factor authentication, and backing up your data regularly.
  • Lack of regulations. Cryptocurrencies are not regulated and thus can be changed anytime, especially since lawmakers are working on regulations to govern digital currencies.

How to Start Working with Cryptocurrency

The business of cryptocurrency is somehow challenging and complicated. Follow these steps to use cryptocurrency in your business:

  • Create a Wallet

Just like operating a bank account, you need a cryptocurrency wallet, which will act as your bank account. A wallet is simply an address where your customers will send their payments. Making payments to wallets is like sending an email. Customers can enter your address or scan a QR code using their smartphones, enter the amount, and send.

If your business receives several payments or finds this payment process quite complicated, you can consider using a payment processor. Payment processors, such as Coinbase or BitPay for Bitcoin, charge monthly fees for these services, but they are cheaper than credit card companies.

  • Advertise that You Accept Cryptocurrency

Your customers won’t know that they can pay using any cryptocurrency unless you inform them. Therefore, tell about the availability of this payment method either physically or through your social media platforms. For instance, you can add the “Bitcoin Accepted Here” button on your online store where PayPal, Visa, MasterCard, and other payment gateway buttons are.

  • Bookkeep and Monitor Your Taxes

Like any other financial transaction in your business, you should consult with your accountant to ensure that you monitor your taxes and bookkeeping records. Fortunately, with the increased adoption of these digital currencies, several accounting firms specializing in cryptocurrencies have emerged.

Is Cryptocurrency Right for Your Business?

Even with unmatched convenience and several benefits, the main factor to consider before using cryptocurrency in your business is if your customers want to make payments using this method. If your business has customers ready to make payments using digital currencies, you should consider setting up a wallet account with a cryptocurrency of your choice. You should also keep in mind that Bitcoin is the common and widely used cryptocurrency.

Based on this, do you think cryptocurrency is right for your business? Share your thoughts below.

About the author

Darrell Rios is a former journalist and owner of several local shops. Now in his spare time he writes about business and entrepreneurship, as he has extensive experience in organizing startups and business analytics.