Since cryptocurrencies have already been accepted as an alternative payment method worldwide, incorporating them into your business can be a good idea to boost up your sales. However, the lack of information could be a barrier to take the initiative. In this piece, we discuss how to incorporate cryptocurrencies into your business along with their associated benefits and drawbacks.
Before we go into details, let us quickly recall the main features of cryptocurrency.
- Cryptocurrency is a blockchain-based digital asset. The word cryptocurrency represents the encryption technology used to secure digital assets.
- The organizational method to ensure the integration of transactions is known as the blockchain.
- A blockchain is an open-source ledger used for recording crypto transactions in form of codes.
- Crypto transactions are recorded in blocks and then linked to a chain of previous crypto transactions.
- To store, send, or receive cryptocurrencies, you need wallets i-e hot or cold wallets. Hot wallets are usually available with online cryptocurrency exchanges. On the other hand, cold wallets refer to all such wallets that are not connected to the internet. It can be a physical device, such as USD Drive or Portable Hard disk.
- Unlike traditional currencies, cryptocurrencies are decentralized having no central authority managing them.
How to incorporate cryptocurrencies into your business?
You may have a retail business outlet located in the middle of the city or you might be rendering services through an online portal. In each case, you can follow the given below steps to start accepting cryptocurrencies as a form of accepted payment method. Please note that we’ll take Bitcoin Cash (BCH) as an example.
Accepting cryptocurrencies for in-store payments
When your customers come to the cash counter to make payments, you can offer them to pay in cryptocurrencies. You don’t have to use an additional device for doing so. Instead, exiting laptops or mobile phones can work great.
Instead of collecting cash from customers, or swapping their debit/credit cards, you just need a POS – point of sale application downloaded on your device.
When customers are ready to pay, open the app and select the respective cryptocurrency i-e Bitcoin Cash (BCH).
Enter the amount of the product in local currency. The app will automatically convert the amount customers need to pay in cryptocurrency, such as BCH. As soon as the app finishes the conversion, it generates a QR code.
Show your device to your customers displaying the QR code and ask them to scan the QR code using their wallet apps to make the payment.
Accepting cryptocurrencies for online stores
Incorporating cryptocurrencies in your e-commerce business is even easier than retail outlets. Along with other payment options, such as debit/credit cards, bank transfers, e-wallets, you just have to add the “pay in crypto” button on the payment page of your website.
When customers will finish adding products to their carts and would like to checkout, the crypto gateway will automatically calculate the amount they need to pay in digital currency.
Customers will see a QR code generated by the crypto gateway instead of being asked to enter credit or debit card details.
To proceed with the payment, customers need to scan the QR code using their wallet apps.
How soon will I receive the payment?
Crypto transactions are way faster than conventional payment processes. It’s up to you whether you wish to keep your payment into crypto wallets or you want to have them converted into fiat and transferred to your bank accounts. In case you would like to keep your digital assets intact in your crypto wallet, the whole process doesn’t take more than a couple of seconds. However, conversion funds can take up to 24-hours to reach your bank account.
Advantages & disadvantages of accepting cryptocurrencies
Accepting cryptocurrencies have several advantages. However, there are some cons as well. Listed below are a few pros and cons that you may wish to consider before incorporating cryptocurrencies into your business.
Merchants Security: The decentralization of cryptocurrencies helps merchants to stay protected against fake chargebacks. Since no intermediary can reverse the charges, the crypto transaction is considered final just like a cash payment.
Low transaction cost: Since cryptocurrencies do not involve a middle-man fee, the cost of transactions could reduce significantly. Unlike accepting payments through credit cards that carry a fee of 0.25 cents on each swipe along with a 2-4% fee on the total amount of transaction, crypto transactions are usually free of cost.
Increase in sales: Accepting cryptocurrencies can help businesses to have increased market share. In addition to making sales to local clients, businesses can start accepting international orders. Thanks to the cost-effective and efficient crypto transaction process that help corporation to receive instant payments across the borders.
Technical Issues: Accepting payment in cryptocurrencies means you have to set up a digital wallet. Deciding upon which type of wallet you wish to use, such as a hot or cold wallet along with your preferred exchange involves a little extra work. To some businesses, it might not be a big deal, but it could be a source of inconvenience for small businesses especially if an owner is less familiar with the use of technology.
Volatility: Cryptocurrencies are highly volatile. The risk of change in the prices of cryptocurrencies is way more than the fiat currencies. For example, Bitcoin (BTC) is known for its drastic ups and downs over the years.
Regulatory concerns: Cryptocurrencies are not regulated. Therefore, any development concerning the regulation status of cryptocurrencies could create a problem for businesses. China could be an example where cryptocurrencies have been completely banned. You may find more information about regulation on our website.