Thinking about accepting cryptocurrency for your business? What are the benefits of accepting this controversial digital currency? What are the risks? It’s important to take the time to weigh the pros and cons so that you ensure that this strategic move will be the right one for your business.
The Pros For Accepting Crypto Payments
Diversification
Without question, increasing the number of payment options available on your business website is bound to boost the number of customers that will buy from you. Not only will you be attracting forward-thinking, crypto-enthusiasts, and those wary of providing their credit card information, but you will also be attracting the unbanked population around the world.
One of the many perks of accepting cryptocurrency is that it opens your business to international markets, without having to adopt costly international payment solutions.
According to Statista, 69% of the population in Vietnam remains unbanked. It is currently 60% for Nigeria. This amounts to more than 186 million potential customers since it has been discovered that cryptocurrency adoption is at its highest in Vietnam and Nigeria.
Transaction Fees Are Lower
Banks and credit card companies are known to charge considerably higher transaction fees that, on average, come out to 1.3-3.5%. This is separate from the payment processor’s fee. On the contrary, cryptocurrency transactions don’t charge fees. If there are fees to be paid, they would be as low as 1%.
Loyal Following
The devotion to cryptocurrencies has reached a fever pitch as millions of mostly young men consume any content they could possibly get their hands on related to cryptocurrencies.
Although there is a misconception that cryptocurrencies can bring untold riches, just the fact that a business is willing to adopt this trend demonstrates a forward-thinking approach to digital payments. This will get their attention and will reward that business with their loyalty.
The Cons
Universality Is Lagging
Despite the countless white papers, YouTube videos, conferences, and celebrity endorsements, such as from Elon Musk, the adoption of cryptocurrency still remains slow to universal adoption.
Although the barriers to entry seem to be falling, it still demands a higher level of tech-savviness to secure cryptocurrencies and buy with them. Then there are the plethora of cryptocurrencies that seem to be hitting the stage at a rapid pace. In just the first half of this year, thousands of new coins have hit the crypto market.
The risk for businesses is that they will invest time and funds into accepting a particular type of crypto coin, only for it to crash in popularity in favor of a newer, more popular one.
It’s Volatile
This is perhaps one of the most controversial aspects and arguments against mass adoption. Bitcoin suffered a value drop from $60,000 in April of this year to $30,000 only two months later. With fluctuations like this, businesses wanting to accept cryptocurrency must proceed with caution.
With this erratic volatility, pricing products is more difficult. Returns with crypto are an even trickier possibility. Many stores that accept cryptocurrencies list their prices in US dollars and match the dollar price for returns.
Ongoing Regulation
For many crypto-enthusiasts, there is a looming fear that cryptocurrencies have had their last run. Many governments around the world are starting to clamp down on cryptocurrencies.
Some of the reasons include the electricity required to keep the networks running (environmental impact) as well as the general lack of state oversight concerning decentralized currencies.
What Is Right For Your Business?
At the end of the day, your reason for accepting cryptocurrency as a form of payment within your e-Commerce business will depend on your customers. If your customers begin to demand to pay you in a growing, popular crypto coin, it may be worth a look.