Subway, Expedia, and Microsoft have all decided to accept cryptocurrency recently. But what about the average small- or medium-sized business?
Almost 90% of Americans have heard of Bitcoin, according to Cointelegraph. But that doesn’t mean they’re ready to use it quite yet. Only about 11% own it. Still, cryptocurrency usage continues to soar in places like San Francisco, New York, and Tampa — and in places like Canada (the first country to regulate the digital currency), the Netherlands, Slovenia, Israel, Switzerland, and countries with volatile currencies, like Zimbabwe and Venezuela.
As more small businesses begin to accept cryptocurrency, more people will also start using it. But there are plenty of pros and cons of cryptocurrency that businesses should consider before they decide to accept this currency of the future.
The Benefits of Cryptocurrency for Businesses
Almost every small business owner dreads the customer who wants to use a credit card for a $2 purchase. Those 2-4% credit card transaction fees can add up quickly! Luckily, cryptocurrency allows businesses to avoid these hefty fees by charging a low flat fee. Cryptocurrency transactions are also faster than traditional transactions, taking less than 90 minutes to complete on average.
There are also built-in protections for merchants since all transactions are final. Businesses that sell products internationally often turn to cryptocurrency transactions because they avoid the hassle of exchange rates and the associated fees.
Perhaps most attractive to businesses, cryptocurrency is the way of the future and can attract younger customers! Businesses can also easily integrate their cryptocurrency wallets into their POS systems, which means that there is not a significant additional investment.
The Drawbacks of Cryptocurrency for Businesses
There are also some drawbacks to accepting cryptocurrency. For one thing, cryptocurrency can be hard to wrap your head around. Additionally, business owners who do not properly store their cryptocurrency can feel the negative effects of market volatility.
Also, cryptocurrency is not backed or insured by governments (unlike traditional currency) and can come with complex tax regulations. Business owners should consult with tax and regulatory experts before deciding to accept cryptocurrency.
This infographic courtesy of Fundera.com