Cryptocurrency & Business: Are Crypto Payments the Way to Go?

21.02.2022

In general public, crypto is often labelled as “the future of currencies” or the “people’s currency”. But does it really have the potential to facilitate B2B and B2C payments? What are the advantages and disadvantages of accepting crypto as a payment method? Should your business start accepting crypto? Let’s look at crypto for businesses in more depth.

Let’s start with the why…

If you run a business, you may have already heard that an increasing number of businesses are accepting (typically) bitcoin as a payment method. You may have asked yourself: but why? Should I add bitcoin to my accepted payment methods, too? First of all, it’s important to understand that any crypto runs on blockchain technology, which can process a massive amount of transactions in a very short time. This technology also adds a layer of security for a fraction of the processing costs. Blockchain transactions are easily available world-wide - this convenience makes international transactions simple and opens the doors of businesses to international buyers. We won’t go into much depth of how blockchain and cryptocurrencies work in this article, but if you want to learn more about it, check out other articles on our blog.
Cryptocurrencies are also known to attract new demographic groups to businesses - cryptocurrency users are characteristic for their preference of high-tech and specific transaction needs. Some clients and stakeholders seek cryptocurrency transactions and will be more likely to engage with the business if they have this option. Additionally, crypto is a popular innovation, often viewed as something “futuristic”, so if that is what your customers might seek, crypto payments are an attractive feature to have.

What else can crypto do for businesses?

So far, so good… but what benefits do crypto transactions provide directly to businesses? First thing that may come to mind is raising knowledge about crypto in the internal environment, and obviously, if digital transactions ever become the standard, you’ll be well prepared and ahead of your time. Crypto transactions are irreversible, which minimises the risk of fraudulent chargebacks. As we know, cash is subject to inflation. Crypto can act as a balancing asset, as it is commonly used as an investment vessel - however, this is where caution should be taken and this is where you really have to assess your situation and whether your business can take the volatility risk that comes with crypto.

So what are the risks?

As to any new technology, there is a certain learning curve to using crypto and if you’re completely new to it, definitely take some time to research how it works, what are your options and how to assess the risk profile of your business. Do not use crypto as a payment method “just because it’s cool” - learn about it first, maybe get some experience as a user, or get advice from a professional. Just as you wouldn’t want to run a marathon if you’ve never ran before, you definitely wouldn’t want to take crypto from your customers without the technical know-how needed. Apart from tech knowledge, you have to be able to evaluate whether crypto suits your business - does it align with its philosophy and culture? Keep in mind, that accepting crypto will require more than just adding the option to your website - you’ll have to pay attention to your country’s restrictions and anti-money-laundering requirements. Last but not least, definitely make sure your business can take the volatility of crypto as an asset, or find a merchant that will exchange your crypto for cash immediately.

But how to actually do it?

When you’re certain that you want your business to accept crypto, all there is left to do is to actually make it happen. Here, you have several options. You can either look for a company that will handle your crypto payments for you (just like PayPal handles digital cash payments), or you can process your transactions manually. Whichever you choose depends on your budget, the number of transactions that your business will likely have to process, how you want to receive the payments, your experience with crypto, etc.. For a mostly hassle-free, hands-off approach, you can choose a third party vendor. You will have to save some budget for their services, but the vendor can ease some of the technical requirements and manage some (although not all) of the risks connected to crypto transactions. If you don’t want to rely on third parties, then implementation of crypto as a payment option will be a bit more difficult and complex. This may be a topic for another time, but in short, this approach will require long-term planning, strategy and well thought-out implementation, but if you expect crypto payments to be a vital part of your business, this approach can bring about many potential benefits.