Adam Lyons is an business advisor for 500+ brands, including PepsiCo and Nike. Lyons has saved 1,800+ businesses via The SMART Blueprint.
As a business consultant for a number of brands, I have a prediction about cryptocurrency. In 2022, any company accepting cryptocurrency as a form of payment will have a significant competitive advantage over the rest of its industry.
I don’t work for Bitcoin and I have no stake in this game. I am just a business consultant who has worked to help save around 1,800 small businesses since the start of the pandemic in 2020. I have seen, however, the growth in the popularity of cryptocurrency and read the research on consumer payment preferences when it comes to digital wallets.
Now, I know you might be hesitant to tell customers “Put your wallet away and transfer me some Bitcoin, Ethereum or Ripple!” Let’s look at five reasons you might want to accept cryptocurrency payments this year.
1. Lower transaction fees.
One advantage that cryptocurrency has over traditional money is that it requires very low or even no processing fees. This can help business owners keep more of their profit. The lower processing fees can also allow the exchange of cryptocurrencies to happen, well, faster. Each cryptocurrency is connected to different blockchains, which will lower transaction fees even more if you are trading the same cryptocurrency.
2. Attraction of new customers.
Virtual currencies can help you attract new customers and give your business a cutting-edge image. More people than before are interested in investing, spending and trading cryptocurrency. A small business can get ahead of its competitors by taking the risk of getting involved with blockchain technology. Accepting crypto can help your business reach customers who are looking for ways to use their earnings.
3. Acceptance of payments from anyone.
Perhaps one of the most important factors is that you can accept cryptocurrency payments from anyone in the world. A small business’ online store will be reachable to people living close by, as well as people in Turkey, China or even Australia! As long as a person has access to the internet, they will be able to make a purchase. You are even able to accept virtual currencies if your customers don’t have cash or a credit card. Some people don’t like dealing with banks or credit card companies, and they may not have checking accounts or credit cards.
You will also be able to accept international payments without worrying about complicated currency conversions or credit card chargebacks. And you’ll probably find that many of your customers pay in cryptocurrency as well, because of the lower transaction fees.
Most major cryptocurrencies, such as Bitcoin and Litecoin, are already compatible with point-of-sale devices and e-commerce websites, making the process of accepting cryptocurrency and making bitcoin payments manageable for many financial institutions.
4. Potentially lower fraud risk and risk of chargebacks.
Cryptocurrency transactions are irreversible, which means you don’t have to worry about chargebacks or fraud as you do with credit cards.
With cryptocurrencies, there is not a possibility of someone canceling their payment or getting their money back after they have made a purchase, meaning there is less chance of fraud.
Accepting virtual currencies also reduces the risk of fraud for businesses that don’t have time or resources to have security experts on hand for self-defense from scammers.
5. Smaller risk when trading.
The best part of accepting cryptocurrency payments is there can be a smaller risk. For example, if you’re a small business owner in the U.S. and you accept Bitcoin as payment, then when the value is high, you will sell it at that price. If the value of Bitcoin goes down, your business won’t suffer from losses because you haven’t exchanged your crypto to fiat currency yet.
All in all, I feel there are good reasons to accept cryptocurrency as a business. Before doing so, however, it’s important to consider the volatility of the crypto marketplace and what that might mean for you. Volatility can be mitigated in part by the ability to convert cryptocurrency payments to U.S. dollars upon receiving payment.
There is also the chance that the government intervenes or cryptocurrency simply loses favor with the masses — losing its value, too. I would advise at such a time that business owners update payment options like you would software and remove the option to pay with crypto.
It’s also important to note that many customers may not currently use crypto so it may take time before your first sale. Marketing efforts in the form of emails or texts to customers would help spread the word.
One last roadblock may simply be that you don’t yet understand cryptocurrency or it’s wholly unfamiliar. Then again, that may be the same reason that stopped you (and me) from purchasing a form of cryptocurrency in its infancy.
In conclusion, the mainstream adoption of cryptocurrency transactions seems inevitable in the near future. This means it’s a good idea for small businesses to consider accepting cryptocurrencies now or in the near future. It may be a forward-thinking opportunity that aligns with the potential future of cryptocurrency.