Bitcoin is on the verge of something great. People are now seeing it as an investment, trading, and payment option. And more than 100,000 merchants are now accepting bitcoin, including Microsoft, Expedia, and many other international companies.
According to Coinbase, over 48,000 businesses have integrated their bitcoin payment solution. With that said, we are far away from seeing bitcoin as a mainstream payment option, but it has already started showing its potential.
As mentioned above, many businesses have started accepting bitcoin as a payment option. But should you take the mighty step as a small business owner? In today’s piece, we’ll find out the pros and cons of accepting bitcoin for small business payments.
Pros of Accepting Bitcoin For Small Business Payments
According to a LexisNexis 2016 study, businesses lose around 1.47% of revenue due to chargeback frauds. Bitcoin eliminates the danger of chargebacks and saves you as a small business owner from the cons.
By enabling bitcoin as a payment method, small business merchants can reduce chargeback fraud, which will help them boost revenue. Bitcoin technology is created in a way so that you don’t have to worry about payment reversals and chargebacks.
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Fewer or No Transaction Fees
Small business owners are often worried about paying a massive sum of money in transaction fees. But it’s not the case when you accept bitcoin as a payment method. Bitcoin exchanges offer transaction fees that are lower than 1%. And if the payment is peer-to-peer, guest what? There’s no fee at all.
Lee Marburg, the founder of CoinsForTech, told U.S. News & World Report, “We processed over $500,000 in transactions and paid nothing in processing cost.” The company saved around $17,000 in fees alone in one year.
Simple and Fluid International Transactions
Imagine you are delivering your services or products to a client in Africa, and you want quick payment; what are your options as a small business owner? Traditional payment methods will take time, and they might not be supported in some regions. But bitcoin has got your back.
Small businesses can accept international payments without any additional cost or barriers. All you need to do is just provide your bitcoin wallet address to receive payment from any part of the world in minutes.
Bitcoin is famous for being the payment method of individuals offering “illegal services.” But it doesn’t mean all the businesses who accept bitcoin are shady or illegal. Anonymous transactions can be beneficial for your small business, especially if you prefer privacy. By accepting bitcoin, no one will question you about your money and why you are sending or receiving a considerable amount. But it doesn’t mean that you start using the power of anonymity for doing shady businesses.
Every story has two sides. Let’s move forward and learn about the cons of accepting bitcoin for small business payments.
Cons of Accepting Bitcoin for Small Business Payments
According to a report from Kaspersky Lab, around a quarter of all financial malware attacks aim at bitcoin. Another study found out that 18 out of 40 bitcoin exchanges fell victim, with customer accounts wiped out to zero by hackers and frauds.
As a small business owner, you wouldn’t like to see your hard work go in vain just because a bunch of hackers was testing their skills. Security is one of the significant concerns when accepting bitcoin as a payment option.
Based on online market dynamics, the world of bitcoin is volatile. You’ll often see the value of bitcoin fluctuate, and that’s precisely why it’s not great for small business owners. You don’t know when the bitcoin will lose its current value.
On the other hand, when the bitcoin market goes up, your customers will hesitate to spend their bitcoin, which will hugely affect your business.
Accepting bitcoin and holding them as an alternative for money can be risky. And as a small business owner, inviting too many risks can be harmful to you in the long run.
Transactions are public
Although bitcoin transactions save small business owners from chargebacks and other frauds, all transactions are recorded and preserved. Each transaction is recorded on a public ledger, and anyone can see it. If your wallet identification is leaked or hacked, you can lose all your money.
Wallet addresses can’t be recovered
If a small business owner loses its access key to the bitcoin wallet, they can’t recover it. In the world of crypto, there is no central record of wallet address or access keys. The only person who has access to the wallet keys is the owner. If you anyhow lose the wallet access keys, all the bitcoin stored in it will be gone forever.
And that’s a wrap! Accepting bitcoin for small business payments has its pros and cons. But which side will you lean toward?