Can Cryptocurrencies Be Trusted as a Payment Method for Your Business?
A growing number of businesses worldwide have begun to use cryptocurrency for a myriad of transactional, operational, and investment purposes. In fact, according to some sources, over thirty percent of small businesses accept it. And now that this exchange medium is over a decade old, it’s finally become mainstream.
But as is the case with any frontier, cryptocurrency doesn’t only come with solid incentives, but also danger and risk, such as its volatility. So, to help you decide whether or not it can be trusted as a payment method for your business, we’ll discuss some of the pros and cons it yields.
What are the benefits of cryptocurrency?
When compared to more traditional POS or point-of-sale systems, there are a number of advantages cryptocurrencies offer that many others lack. Here are some that continue to entice many.
- Minimal transaction fees. One of the most notable benefits of cryptocurrencies is that it lacks central intermediaries, resulting in the reduction of transaction fees. Most brands and companies that accept payments via credit card usually incur additional fees of around two to four percent for every swipe. The costs might appear low, but these can quickly add up. For this reason, most have purchase minimums when it comes to credit cards. On the other hand, crypto reduces these fees to below a percentage of every transaction’s value.
- Merchant protection. Apart from the lower transaction costs, another advantage the decentralized setup offers is that it gives merchants a certain level of protection from questionable chargebacks. Since the transactions are final, it ensures that no third party will be able to reverse the charges.
- Improved sales. Crypto also presents organizations to further expand and give international consumers access to goods and services that would otherwise not be provided. For example, retailers that used to be limited by their geographical location can now cater to other countries if they accept cryptocurrency.
- Consumer convenience. Consumers’ personal information is also protected with the use of cryptocurrencies while offering another payment method. As a result, it’s more convenient for them.
What are the risks of cryptocurrency?
While cryptocurrency comes with a bevy of benefits, it’s not without its fair share of downsides. With that said, here are some of the risks businesses open themselves up to by accepting this payment method.
- Scams. While cryptocurrency does offer a reasonable level of protection from cyberattacks, it still isn’t completely safe. After all, billions of dollars have already been lost due to platforms like the USI Tech scam, which remains one of the biggest fraudulent schemes ever committed. Thankfully, there are chargeback companies that specialize in recovering lost funds from these types of scams.
- Technical barriers. Cryptocurrencies usually require digital wallets on their currency exchange, and this could be technically prohibitive for some organizations who may be unfamiliar with its technology. In addition, it’s an information-dense trade that can be more than a little challenging to grasp. As a result, it could be an obstacle when running a business.
- Regulatory uncertainty. Last but not least, another challenge that cryptocurrency will likely bring about would be the changes in its regulatory landscape. Currently, lawmakers are still creating regulations for its governance, and until this is in place, it’s likely to go through many different changes.
When all’s said and done, cryptocurrencies can be a trusted payment method despite all of its current disadvantages. The key is understanding what its drawbacks are so that you can carefully prepare for the challenges that they can bring.