Today, over 15,000 small businesses around the world accept Bitcoin payments for their goods or services. And with good reason—accepting Bitcoin offers many upsides for small businesses.
Some established small business owners might consider Bitcoin a trend that their business can sidestep. However, beyond the cryptocurrency boom that Bitcoin has come to represent, accepting this cryptocurrency may be a practical tactic for many small businesses—not just a flashy one.
What are the benefits of accepting Bitcoin at your small business? And are they worth the potential downsides? Here’s your guide to understanding why your small business should accept Bitcoin payments:
Opens up your customer base
According to Bitcoin Market Journal, there are over 7 million active Bitcoin users right now. If your business is digital and can cater to customers around the world, this is a huge potential customer base. Offering the option to pay for your goods or services with Bitcoin will help open up your business to consumers who prefer this payment method. Plus, through databases like Coinmap, Bitcoin users will be able to find your business specifically because you accept Bitcoin payments.
Comes with fewer transaction fees
Because Bitcoin payments aren’t processed and approved by a bank, they will involve much lower transaction fees than credit, debit, and ACH payments. Bitcoin transaction fees are small fees for having a Bitcoin payment processed by a miner and confirmed by the Bitcoin network.
Depending on how quickly you want to access your payment, you’ll pay around $0.19 to $0.77 in processing fees for Bitcoin payments. Keep in mind, though, that Bitcoin transaction fees can fluctuate, so these numbers aren’t set in stone.
Regardless of how much they might shift, Bitcoin transaction fees are far less than credit card payment processing costs. Compare Bitcoin processing fees to the 1.7% to 3.5% of the transaction that credit card processing fees tend to entail, and you’ll understand that Bitcoin transaction fees are a bargain.
Gets your money to you faster
When you accept a Bitcoin payment, you can choose how quickly you want the Bitcoin Network to process that payment. And fortunately, every Bitcoin processing option is much faster than any credit card network.
If you’re willing to pay the highest Bitcoin transaction fee (still just around $0.77), you can choose to have it processed within the next block of payments, which will take about 10 minutes. Or, for a slightly lower processing fee, you can have your Bitcoin payment processed within the next three blocks of payments, which will take around 30 minutes. For the lowest processing fee possible, you can have your Bitcoin payment processed within the next six blocks of payments, which will take about an hour to process.
Regardless of whether you’re willing to pay for the fastest payment processing possible, Bitcoin payments will be in your hands within the hour. Can your merchant services provider offer you that kind of speed?
Makes international payments easier
If you do any international business, Bitcoin payments could make these transactions much easier to process. Whether you provide digital services to companies abroad or you purchase materials from an international supplier, Bitcoin payments for international transactions will help both parties avoid fees.
Because Bitcoin isn’t tied to a specific country, you won’t have to deal with exchange rates. Plus, because you won’t have to send money through a bank, you won’t have to worry about wire fees or any other costly rates that banks might impose on international exchanges.
Acts more like digital cash
Finally, Bitcoin will help your business keep the money it accesses through transactions. Even though Bitcoin is a digital currency, customers won’t be able to dispute charges or outspend their actual funds. As a result, you won’t have to worry about customers disputing Bitcoin transactions like you would with credit or debit card transactions. You won’t have to worry about charge-back or non-sufficient fund fees with Bitcoin payments either, as Bitcoin doesn’t allow for the overspending that debit and credit cards do.
Is accepting Bitcoin worth the challenges?
Accepting Bitcoin payments comes with a lot of advantages for small businesses. Of course, even if Bitcoin is the future of small business, there are a few downsides to Bitcoin that you need to consider. Things like instability in value, changing transaction fees, and potential incoming government regulations are worth considering while you decide whether or not you want to accept Bitcoin at your business.
However, the benefits of accepting Bitcoin are compelling. Be sure to consider both sides carefully, and go for it if you decide those upsides are worth it.
ABOUT THE AUTHOR
Eric Goldschein is an editor and writer at Fundera, where small business owners can find expert insights and tailored financial options such as business loans or business credit cards. Eric writes extensively on financing, marketing, entrepreneurship, and small business trends.