It took only two years from the beginning of the pandemic for our world to start to move towards a digital way of living. The global cryptocurrency usage doubled to an estimated 300 million within this period worldwide. With this being the fact, many enterprises, individuals, and even large institutions started to look at how to accept bitcoin payments.
Since more and more people are getting engaged in cryptocurrencies, an increasing number of small businesses are gearing up to accommodate the growing number of crypto-paying clients. One of the most recent surveys showed that more than 3,6 million Americans would use crypto assets to make at least one purchase this year alone. As a reason, many enterprises provide alternatives to fiat money and give the option of paying with these digital currencies.
According to most recent surveys, businesses see tremendous potential in increased customer interest in cryptocurrencies — some firms are looking to accept cryptocurrency payments online, and the most progressive ones consider doing so even in brick-and-mortar stores.
If you're one of the businesses left out of the ongoing "crypto revolution," the time probably has come to figure out how to adopt crypto payments to keep up with the competition or even be the best.
Many surveys have been related to what firms are thinking to do in the evolving crypto environment, especially smaller to mid-sized businesses. On average, the acceptance of cryptocurrencies by major payment operators and major innovative organizations was identified by approximately 50% of respondents as a reason for accepting crypto payments.
On the other hand, crypto adoption isn't solely a survival technique for small and medium firms. It's more of a tool for increasing productivity and progress. For enterprises, there are various advantages as well as reasons to employ bitcoin and other cryptocurrencies.
With crypto, you will be able to increase your international reach and gain clients abroad. Moreover, thanks to blockchain and the decentralized structure of cryptocurrency, your security will reach another level. Together with that comes fast and efficient payments, low fees, etc. The advantages of embracing cryptos are covered in detail in the following section.
Why should your business accept crypto payments?
Cryptocurrencies have the following main advantages over traditional point-of-sale (POS) systems that you should consider.
Transaction fees: Transaction fees have been reduced significantly due to the lack of a central intermediary. Smaller and medium firms that accept credit card payments through credit card processing companies usually pay approximately 25 cents per swipe plus 2% to 4% of the overall transaction amount. These expenses constantly pile up, which is why many small businesses have credit card purchase minimums on their POS systems, which are even higher with international transactions. Accepting cryptocurrency reduces these fees to less than 1% of the transaction value.
Protection for merchants: The decentralized nature of cryptocurrency also protects retailers against dispute fraud. Since no third party can nullify costs, the transactions are definitive and cannot be reversed.
Increased revenue: Many enterprises use cryptocurrencies to thrive and reach out to foreign buyers who previously couldn't get their hands on the firm's goods and services. For instance, there have already been several firms that have made hundreds of thousands of dollars in cryptocurrencies while selling products to other countries.
Customers will definitely appreciate the convenience
Another interesting fact is that older generations are not yet keen on utilizing crypto assets, whereas younger people are more likely to use digital currency for high-value transactions.
As time goes on, most users will smoothly move on to using cryptos. Adopting cryptocurrency gives all clients more options to pay while also adding another layer of security to their data.
By accepting cryptocurrency as a payment method, you will reduce your firm's transaction processing costs, protect it from excessive fees, widen your client base, and offer a greater level of service to your clients.
Indeed, there is another side to the coin. For example, current regulatory ambiguity. Even though it's still not fully regulated, the trend shows that many countries will do so in the near future; therefore, crypto followers remain optimistic.
Regulations will almost certainly evolve after they are in effect, pushing business owners to readjust. As bitcoin acceptance grows and new challenges and obstacles occur, changes in cryptocurrency legislation are inevitable.
So how can your business accept crypto payments?
1) Remember the efficiency of cryptocurrency payments
As of now, crypto is often treated as an investment. But since cryptos are decentralized and unregulated, they function as peer-to-peer (P2P) payments. Unlike traditional credit card payments processed via several intermediaries, they are transferred directly from one digital wallet to another.
2) Create a cryptocurrency wallet and a cryptocurrency gateway
You must first determine whether you want your crypto payments to be received in cryptocurrency or fiat currency.
If you want to collect, store, and use cryptocurrency for your business or personally, you need a crypto wallet. You'll need a crypto payment gateway if you wish to take crypto payments but have them transformed into ordinary fiat currency. Many prominent services, such as BitPay, offer both wallet and gateway features. Crypto gateways also have several features. They usually include a hosted or noncustodial wallet, which keeps finances from customer crypto purchases until you convert them to fiat money, such as US dollars, and deposit them into your bank account. They also reduce risk because the market rate is paid at the transaction time. You will not lose money if the value of the cryptocurrency drops while the transaction is being validated.
Utilizing a payment gateway in cryptocurrency transactions, on the other hand, introduces a third party. Including a third entity involves additional costs. Compared to a crypto wallet, transaction fees and markups are often more significant when using a gateway.
3) Add Cryptocurrency Payments to Your Online Checkout
Now that you've set up your cryptocurrency wallet and gateway, it's time to integrate cryptocurrency into your website and enable it as a payment method during the checkout process.
There are two primary methods for implementing this.
The first is Open-source API: You can utilize custom HTML code to link a crypto platform with your website if it has an open-source API, which you'll probably discover with self-hosted wallets. The benefit is that you have broader control over the design and functioning of your website, although it does demand technological capabilities, and not every enterprise has them.
Plugin/app: A connection may be available based on your eCommerce platform. It's as simple as downloading and installing the plugin or app on your website. Crypto integrations make it simple to get started because they handle all of the technical details.
4) Facilitate in-store payments
If you allow this method, in-store customers can benefit from the ability to pay with cryptocurrencies as well. There are various ways to manage in-person crypto payments using some of the networks mentioned above. For in-store checkout, it is recommended to introduce a crypto-compatible QR code reader or Near-field communication (NFC) terminal. If you have a mobile Point of sale (POS), you may be capable of integrating cryptocurrency payments with it as well.
Even though cryptocurrencies are still pretty young, it is on the radar of the payments industry. Square, for example, filed a patent for crypto payments technology. PayPal has also "joined the party" and started to allow its users to buy, sell, and keep crypto on their platform before converting it to USD to pay for stuff.
What is the approximate Cost of Accepting Crypto Payments?
Crypto payments have a usual transaction price of a maximum of 1%, which is lower than the average credit card processing fee. Some companies charge even lower transaction costs, such as CoinPayments, with 0.5%. Also, currency conversion and withdrawal fees are two examples of potential additional expenses. Nonetheless, accepting cryptocurrency payments is unquestionably less expensive than traditional solutions.
Bottom Line
Cryptocurrency is becoming more widely available day by day, and early adopters are in a unique position to enjoy the benefits earlier than others. While many people still perceive cryptocurrencies as a "hype" that will fade away, others are betting big on the new digital assets. By accepting crypto as payment, any business can definitely be ahead of the competition.
