As we approach the start of another Bitcoin bull run and another race to new all-time-highs, it’s likely that the cryptocurrency will again be in the spotlight before the year’s end. Whether this time it manages to popularize itself as a means of payment (it was always intended to be that way) or whether it will remain more of a store of value (and of speculation), there are a number of ways it could be an important tool for a business.
What are the benefits of accepting Bitcoin?
Businesses take all the risks when it comes to online transactions, while your payment processors and even your customers take none. Those who work with PayPal in particular are probably all too familiar with fraudulent chargebacks, but even ordinary credit card payments can suffer from this issue. With Bitcoin there is no intermediary or authority that can unilaterally decide to confiscate a payment you’ve already received. Transactions are irreversible and secure, with any necessary refunds you might need to make completely under your control. Cost and time savings from this can even be passed on to your customers!
Easy International Transfers
With Bitcoin there are no middlemen taking commissions for currency conversion or international wire transfers. It doesn’t matter whether the customer is in the same room or using a satellite uplink in the Amazon rainforest. Or whether the transferred amount is large or small. The same fee applies. There’s no multi-day wait time as there is the inefficient and morally questionable traditional banking system. Secure transactions can be confirmed in just minutes or hours, often at a fraction of the price.
Security by Default
One of the reasons payment processors charge such high fees is because they have to deal with all sorts of compliance. With Bitcoin’s cryptographic nature, the security of the network is built-in by default and where PCI compliance falls entirely on the seller, with Bitcoin each party is fully responsible for securing their own funds before and during the transaction, just like someone walking into a store with cash.
What are the risks or problems?
Most tax authorities around the world are, as you’d expect, very far behind the times. Each territory has different rules and regulations, but the common thread is that Bitcoin is generally classed as an asset rather than a currency. This can have complex implications that you’d have to look into and that we can’t go into here. One way around these problems though is to convert Bitcoin into your local currency immediately on receipt and input that into your accountancy system, or use something like OpenNode to do this automatically.
Placing Burdens on your clients
For anyone willing to pay with Bitcoin, this probably isn’t a concern as they are likely to be more than sophisticated enough to handle the process. As more and more people become comfortable with the process, this will be less of a concern. But perhaps don’t force people to pay with crypto!
If you’re able to avoid instant Bitcoin to local currency conversion and you’re able to hold on to the physical Bitcoin itself, one concern you might have is the famous wild swings in valuation. If you’re working in your native currency and have expenses in it, having your recent payment be worth 10% more or less a week later can be somewhat problematic. This will change as more people start using Bitcoin in some way, but currently it is an issue for small fish.
How can I get started with Bitcoin for business?
It makes sense to offer clients every payment method you can, particularly if there’s no or little cost to you doing so. More and more businesses around the world are implementing a Bitcoin strategy.
One of the best resources I’ve found to guide you through the basic steps is this article from Cointelegraph.com.
When you’re ready to implement Bitcoin payments into your online strategy, just drop us a quick message and we’ll be in touch.