As cryptocurrencies become mainstream, several businesses are accepting them as a payment method. So, the question is, are cryptos the ideal payment method for your business?
Here are some of the things to know before accepting crypto payments for your business.
Reasons to accept crypto payments for your business.
Before accepting crypto payments, you have to understand what you gain. Generally, accepting crypto payments is great for your business. That explains why several merchants are already accepting them.
Some of the benefits that come with accepting crypto payments for your business are;
- Lower transaction fees – cryptocurrencies come with lower transaction fees than credit cards and other payment options due to a lack of intermediaries.
- Merchant protection – the decentralised nature of blockchain protects businesses from fraud. In addition, the lack of intermediaries helps avoid reversals of transactions.
- Increased sales – the use of different currencies in various countries limits international trading. However, when you accept crypto, your business can accept payment from any country where crypto is legal, hence a larger market.
- Bitcoin is also an investment – when paid in cash, you have to find other ways to invest it. However, for Bitcoin, it’s already an asset. So instead of converting it to money, you can keep the Bitcoin to trade when the value rises.
The risks of accepting crypto payments for your business
While crypto payments are a popular option for many businesses, it comes with various risks you need to know of before accepting it.
- Irreversible payments – while irreversible payments protect your business, they can also be a challenge. Complaints and customer requests for refunds are common in any industry. However, it can become an issue if you are unable to return the money to the other party.
- Tax implications – as a new asset, the regulations around cryptos keep on changing. Anytime the Australian Securities and Investments Commission (ASIC) introduces new crypto regulations, taxes vary. This implies your business.
- Possibility of illegal transactions – without central authority control, your business can unknowingly accept proceeds from illicit transactions. This impacts your wallet, as most networks will flag such cryptos.
- Volatility – the lack of a central regulation for cryptos means no price control. Your business has to contend with the ever-changing crypto values. You might lose a lot of money if the crypto value goes down before converting the payments to fiat currency.
How to accept crypto payments for your business
Now that you know about the benefits and risks of accepting crypto payments for your business, it’s time to learn how to accept crypto payments.
The first step to accepting crypto payments is creating a wallet that will allow you to store and sell the crypto you receive as payments. Various crypto wallets come with private and public keys for access. You can also use the crypto provided wallets if you intend to convert the payments into fiat currency immediately.
The next step is to partner with a crypto payment processor to facilitate your payments. There are several crypto payment processors like BitPay, Coinbase commerce, CoinGate and Coinpayments, to choose from. The processor integrates with your eCommerce platform to facilitate crypto payments from anywhere in the world.