Bitcoin is the oldest and largest form of cryptocurrency in the world today. It’s a digital value concept that isn’t sponsored by any specific country’s government. This makes it well suited platform for online transactions in today’s global market. With no exchange rates or government oversight to worry about, traders from all over are delighting in the ease and anonymity of this option. But businesses do need to be aware that various governments around the world have sought to regulate and control how and when Bitcoin can be used.
One Bitcoin is actually a string or line of numbers that comes when you solve a complicated mathematical algorithm using a certain software system. These numbers are the result of a ‘mining’ process, with each new Bitcoin being more difficult than the previous one. This is why its value keeps increasing.
However, Bitcoin is also subject to crashes and busts, just like any other valuable commodity like silver or gold (or the dollar). This, along with the vulnerability to scammers and hackers, makes investing in and using Bitcoin a bit doubtful. While large corporations might easily accept Bitcoin for part of their transactions and bear the loss, if any, small businesses can usually not afford the same risk.
On the other hand, there are also a lot of advantages involved with using Bitcoin for payment as a small business. if you’re a small business owner and want to know what to do about the Bitcoin buzz, the discussion below might help to clear things up:
The Cons of Accepting Bitcoin for a Small Business
1. Legal Issues
Bitcoin isn’t in the control of any specific central bank, government, or even most large corporations. This is why the fees are so low or non-existent. On the other hand, this non-affiliation with any recognizable group also makes Bitcoin a shady area where legality is concerned. Bitcoin payments are regarded as suspicious by most governments, which is why it might not even be legal in some countries.
Another concern for small businesses regarding Bitcoin payments is the instability involved. Over the course of a single decade, Bitcoin has surged and plummeted in value, making billionaires out of some and then taking it all away. While this cryptocurrency may not be subject to the exchange rates of other currencies, it is subject to its own. The amount of Bitcoin you use and the country of transaction or purchase would affect the exchange rates and make your cash flow unpredictable.
Small businesses usually can’t afford even a tiny risk or loss, especially when they’ve just launched. If you start accepting Bitcoin for payments, you may suffer from false invoices, unauthorized payments, and irreversible losses. This happens when Bitcoin data gets compromised, as is very much possible with so many hackers and scammers out there. Once your Bitcoin payment is made to an account, you can’t reverse the transaction by any means.
The Pros of Accepting Bitcoin for a Small Business
Now that we’ve dealt with the cons of Bitcoin for small businesses, we should also consider the pros. This would help us decide whether any small business can actually make good use of Bitcoin and hence enhance their operations.
1. Low Fees
Bitcoin payments usually don’t have transaction fees. If they do, they could be as little as 1 percent of the total transaction. This is quite infinitesimal when compared with regular credit card fees. As a small business, the removal of credit card fees could gain you a lot of customers quite easily in the beginning. This would help you to expand or at least stay stable in the early years of business.
Small companies and startups are also pressed for time. They don’t have many resources that larger establishments do, so they need to make the most of their days. Using Bitcoin as payment would be more cost-effective as well as a quicker transaction than services like PayPal.
Many entrepreneurs would find the saved time highly convenient, especially since there are no permissions to seek. All you have to do is download an app and ask customers to pay your company through it. The end customer can receive a transaction over the Bitcoin network in around ten minutes or less. There’s no middleman, so you get the full transaction in the shortest time possible.
The flexibility of Bitcoin lies in its universality. You’re not limited to measuring your payments by the dollar, euro, or any of the strongest currencies according to country. This way, you can reach clients in just about any area of the world, selling your wares globally yet without the perceived costs. The universal exchange rate means that no one’s exploited.
How to Accept Bitcoin as Payment
If you’re still a small business, you might want to take advantage of Bitcoin for more flexible payments, lower, fees, and a wider outreach. However, you might not know just how to go about this, or how to accomplish this conversion in the best manner possible. The tips below would hopefully help out in this area.
You first have to create your unique Bitcoin address, where you can ask customers to send their payments. However, this would only work if you deal with just a small number of Bitcoin users. You would have to create a virtual Bitcoin wallet in order to enable Bitcoin payments. This works like an emailing process, but you might want to list the instructions on your website so that no one’s confused.
The second method is to use a payment processor for Bitcoin. This might cost you a monthly fee or certain percentage for the services, but it would still be cheaper than the usual credit card charges or PayPal. The processor also gives you the ability to convert your Bitcoin into cash easily in order to pay your suppers.
When you’ve set up your account, you should advertise your acceptance of Bitcoin on all platforms. You can accomplish this by hanging posters in any brick-and-mortar stores you have, putting the Bitcoin symbol on your online payment options, and updating the information on your social media profiles.
One useful tip when accommodating Bitcoin payments is to keep your accountant in the loop. This way, you would have some professional input and guidance on the matter. Knowing how to accept Bitcoin payments and process them is the way to gain an advantage from this technology. You should hence look around for some tutorials in order to get more details about the methods described above.
We may not have covered all the advantages or disadvantages of accepting Bitcoin payments above, but these should be enough to give you an idea of both sides. Since Bitcoin is a bit technical and complex, you may not want to start it with your business right away. However, it is advantageous enough to be a definite consideration for the future.
Plus, no one is saying that you should depend only upon Bitcoin as a means of payments and other transactions. You can keep it as an option, but also reserve it only for your most trusted and frequent clients. Accepting Bitcoin will give you a competitive edge and a modern reputation, so ignoring it completely would mean missing out.