Should a business accept Bitcoin?
This post is a collaboration with https://www.techwarn.com/
As an accepted mode of payment, Bitcoin is yet to cement itself as a major contender. Credit cards and other options, such as PayPal are still the go-to payment options for most merchants.
However, that does not mean Bitcoin is not making its mark. The cryptocurrency is on a gradual but consistent upward trajectory. Last year, for instance, BitPay—a popular merchant payment provider—noted that it had processed over 1 billion US dollars in Bitcoin payments.
Elsewhere, a cryptocurrency startup—Coinbase—reported that approximately 48,000 businesses integrated Bitcoin payment in 2018. To determine if a business should be among the thousands adopting Bitcoin; it is crucial to look at the pros and cons.
Benefits of allowing your business to accept Bitcoin
Bitcoin will help eliminate chargeback fraud
One of the most lauded Bitcoin characteristics is its immutability. Essentially, that means that once a transaction is complete, reversal is impossible. The biggest benefit of the coin’s immutability is that it helps eliminate chargeback fraud.
This is the kind of fraud where a client uses a card to pay for items but once they receive the items, they call the bank to say they did not receive the item and as such, they need a refund. If the bank agrees to reverse the payment, then the merchant becomes a victim of fraud.
Bitcoin has low transaction rates
Credit card payments tend to cost a business between two and four percent of total profits. In contrast, Bitcoin has a low flat fee, which at the moment is less than a dollar per transaction.
Bitcoin facilitates immediate payments irrespective of distance
Bitcoin is a peer-to-peer payment system which means there are no third-parties involved. As a result, during a transaction, there is no third-party dependent waiting period.
Instead, as soon as the client pays, the money goes into the merchant’s wallet, where they can convert it into local currency and withdraw immediately. Note that it does not matter how far the client is from the merchant; the transactions are still instantaneous.
Because Bitcoin is still such a novel currency, it makes the news in ways that fiat currency doesn’t. News outlets across the board—from local to international ones—are constantly reporting on the businesses that are adopting Bitcoin.
Therefore, if a business adopts Bitcoin, there is a chance for free publicity from the various news outlets.
Opens up a business to new clientele
As Bitcoin continues to become more popular; curious people will continue seeking out businesses that have already integrated the coin in a bid to learn and experience the phenomenon.
That exposes a business to new clients who wouldn’t have otherwise known about the business.
Allows the business owner to familiarize themselves with Blockchain technology
Blockchain is the technology of the future, that is a fact. Most tech experts are convinced that in addition to other technologies such as VPN, Blockchain will play a key role in helping secure the internet in the coming years.
Adopting Bitcoin allows a business to acquire some experience with Blockchain technology, and in the future, it will be easier to adopt emerging Blockchain tech.
The cons of allowing a business to accept Bitcoin
Bitcoin’s volatile nature
There is no denying that Bitcoin, similar to other cryptocurrencies, tends to be a bit volatile. Consider, for instance, that in December of 2017, Bitcoin had a market capitalization of $326 billion and yet at the moment, it has a market cap of approximately $67 billion.
Aside from that, the price equivalent for one dollar can fluctuate in a matter of seconds. However, there are ways to mitigate volatility, for instance, by limiting the total time a transaction can take.
If a merchant limits a transaction to a total of five minutes, then the fluctuation is negligible enough not to cause any major discrepancies.
Lack of well-defined regulations
Governments across the world are still grappling with how to treat cryptocurrencies. Regulations keep changing, and if a business happens to be operating in a location where the government can ban Bitcoin from one day to the next or change taxation laws, the business will ultimately suffer.
The exhaustive list of pros and cons above is a good place to start when trying to decide if your business should accept Bitcoin. Mark all the pros that will be applicable to your business and contrast them with the cons.