Should You Accept Cryptocurrency As Payment?

woman hands builder bitcoin crypto as payment for services
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  • There’s an untapped goldmine sitting right under your nose. That goldmine is cryptocurrency.

    This futuristic currency used to be nothing more than an interesting concept. But today, investors and businesses use it. Cryptocurrency enthusiasts are dying to give you their digital money.

    Cryptocurrency gives you many benefits over traditional fiat currency. However, it has its own set of drawbacks as well. Before you start to accept cryptocurrency in your store, understand what it is.

    In this article, you’ll learn what cryptocurrency is. And if you so desire, you’ll learn how to get paid in crypto. 

    What Is Cryptocurrency?

    The general concept of cryptocurrency goes back to the late 1980s. However, the most notable implementation was Bitcoin in 2008. 

    Cryptocurrency designers wanted a better alternative to fiat currency. They wanted a decentralized currency, one that had anonymous transactions, and was secure.

    Cryptocurrency works off a blockchain ledger. Every few minutes, the blockchain writes a new “block” to the ledger. This block includes all the transactions that happened in the past minutes.

    This means there’s a permanent record of all transactions. Further, transactions are not tied to one single entity, like a bank. 

    Crypto miners have to use their computers to process crypto transactions. Computers that solve this complicated equation received a reward of newly minted cryptocurrency.

    Owners of a crypto wallet can make anonymous payments. Their information is protected by secure encryption. Hackers cannot easily steal a crypto wallet.

    Benefits of Cryptocurrency

    Cryptocurrency has the following benefits:

    • Most crypto assets transfer payments faster than Square, Paypal, or Stripe
    • Cryptocurrency does not need third-party payment processors
    • There is more than one cryptocurrency
    • Most have transaction fees lower than Square, Paypal, or Stripe
    • Cryptocurrency uses modern encryption to keep identity and purchases secure
    • Cryptocurrency doesn’t stop working if one miner goes down
    • Anyone can mine cryptocurrency
    • You can store cryptocurrency offline

    Disadvantages of Cryptocurrency

    While cryptocurrency solves a lot of fiat problems, it has its share of issues:

    • Cryptocurrency monetary value can change quickly and unexpectedly
    • Refunds are difficult
    • Chargebacks are almost impossible
    • You may need to regularly monitor local laws and regulations
    • Cryptocurrency is not yet widespread
    • You do need to file cryptocurrency earnings on taxes
    • Hackers can steal cryptocurrency if you do not have security measures in place

    Why Should You Get Paid in Crypto?

    Cryptocurrency is a fascinating concept with plenty of benefits over traditional currencies. But you might be wondering why you should accept it in the first place. Should you accept crypto payments on website payment options, or at your store?

    Popularity

    Every year, cryptocurrency explodes in popularity. The 2022 Superbowl is evidence of this. Several big commercials targeted those interested in buying cryptocurrency.

    One of the biggest issues with cryptocurrency is its usability. It’s very difficult to find businesses that accept it as payment. Even so, people continue to buy and invest in cryptocurrency.

    By accepting cryptocurrency, you’re opening yourself to a market with high demand. Customers will flock to your business in droves. 

    The crypto community is tight-knit. If one person discovers that you’re accepting crypto, they’ll tell their friends. Word could spread fast, increasing your profits.

    If you sell products oriented toward tech-savvy customers, you’ll get even more business. Selling computer parts or software to the crypto crowd is a great way to get business.

    This is why branding your company is so important. Open your doors to new business by branding yourself as a company that accepts crypto.

    Convenience

    Contactless payment is all the rage. It allows people to use NFC readers to make secure, instantaneous payments. All they have to do is tap their phone on the reader.

    Cryptocurrency also uses contactless payment. Customers don’t need to risk losing a credit card. Their cryptocurrency accompanies them everywhere they go.

    There’s no need to handle cash or swipe a credit card that the reader can’t read. Crypto payments are effortless and fast.

    Further, this is ideal for businesses that suffered a hit from the pandemic. Contactless payments keep your employees and business safe from the virus.

    Market Security

    Cryptocurrency can be volatile. But it provides some backup for when the fiat currency drops. If the dollar depreciates sharply, you’ll have something to fall back on.

    An economic crisis could put your business on hold. But having cryptocurrency as an option could be a helpful asset.

    That said, get in contact with a professional financial advisor before making decisions. Cryptocurrency is a new technology with unlimited potential. But you should get professional advice when it comes to navigating these waters.

    Okay, So How Can My Business Accept Cryptocurrency?

    You can accept crypto payments on your own without any third party. But this does require technical know-how. If you’re not tech-savvy, then use a service you can rely on to get started accepting crypto payments. 

    Choose Which Currencies You Will Accept

    Cryptocurrency has thousands of options to choose from. It’s best to choose the most popular cryptocurrencies:

    • Bitcoin
    • Ethereum
    • XRP
    • Cardano
    • Stellar Lumens

    Keep in mind, that the more obscure the coin, the less business you’ll receive. It’s best to start with a coin that is popular such as Bitcoin. As you learn the ropes, you can start to accept other less-common coins.

    If you’re worried about the volatility of crypto, you can try a coin that’s tied to a fiat currency. An excellent example of this is USDC. USDC tries to maintain a one-to-one alignment with the dollar to avoid a crash aka lost money like what happened with UST.

    Cryptocurrency developers are creating new coins all the time. Sometimes these coins explode in popularity. Keep track of the news in case there’s a new coin you’re interested in.

    Figure Out Pricing

    Pricing is something every business has to manage on a daily basis.

    But normally, you do this to clear out supply. Sales and discounts are often temporary changes in the price. Generally speaking, your prices will stay the same until competition or inflation forces you to change them.

    Remember, cryptocurrency is volatile. Prices can rocket up and down in a single day. That means you’ll have to keep close track of the current price of Bitcoin so your sales reflect that price.

    Failing to do this could mean you lose money. The best practice when it comes to how to accept crypto payments is to stay fully aware of the market trends.

    Determine How to Process Refunds

    Cryptocurrency cannot do refunds or chargebacks. This may be a good or bad thing depending on how you look at it.

    On the upside, customers cannot do messy chargebacks that take days or weeks to negotiate. If you don’t accept refunds, you can rest assured customers can’t steal back their money.

    However, accepting returns means you’ll need to keep your own records of purchases. Only this way can you issue a refund in crypto. Again, you’ll need to keep track of prices to avoid giving back too much.

    Decide How to Pay Taxes on Cryptocurrency

    Cryptocurrency is new, so the government is still figuring out how to tax it. You may have noticed your tax returns mention cryptocurrency. Like anything concerning taxes, it pays to know what the law is

    For example, the IRS considers cryptocurrency to be a form of property. However, selling off your cryptocurrency as soon as you receive it might require a tax advisor.

    With that said, expect uncertainty when it comes to future regulations. There’s no knowing how lawmakers will decide to regulate cryptocurrencies tomorrow. Cryptocurrency is a new technology, and as such we don’t yet know how to use it in an optimal fashion.

    How to Accept Bitcoin as a Business

    If you do decide to accept crypto manually, this will take more time and effort. You’ll need to set up a wallet. You’ll need to use a QR code for customers to pay you.

    Further, you’ll have to take care of all transactions. If you want to convert them to fiat, you’ll have to do that yourself. 

    Or, you can hire a third party. Giants like Shopify accept cryptocurrency payments. And when you accept online payments, make sure to design your website to appeal to the crypto crowd.

    Accept Crypto Payments on Your Website

    Now that you know how to accept crypto as a business, it’s time to reap the benefits. Cryptocurrency is the high-tech currency of the future. If you accept crypto payments on your website, you’re staking your business as forward-thinking.

    Now it’s time to customize your website for this incoming crowd of crypto lovers. Get in contact with a business that knows how to draw the eye of new customers and create a website that shines.

    This is intended for educational purposes only, not financial advice.

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