You might have heard about the buzz over cryptocurrencies going around the world of e-commerce. Apparently, paying with Bitcoin is becoming a lot more popular, and so is paying with other cryptocurrencies. But what about you, as a business owner? What are the benefits of adopting cryptocurrency to your business model? Does it offer any special advantages? Should you purchase Bitcoin as well?
In this article, we will discuss the five reasons that make cryptocurrencies an excellent way for merchants to increase their sales, improve their systems, and protect the value of their hard-earned money. Ready to get started? Let’s delve in!
Faster and cheaper transactions
Banks should be slow. After all, you trust them with your money. And yet, in 2020, the banking system is still very slow when it comes to the process of making payments or receiving funds.
Most cryptocurrencies are able to process thousands of transactions per second, faster than any bank ever could. This makes it easier to transfer money through the web, especially when having to pay freelancers or suppliers that are essential to your business.
Aside from speed, it is also important to mention the cost. Most business transactions are burdened with heavy fees that the merchant will most likely have to pay for. This is not true for cryptocurrencies. When sending crypto, all you need to pay for is the miner’s fee, an amount that is tiny compared to the commissions seen in the traditional banking system.
Easier to send money overseas
With the whole world going into a remote-first state, many companies will inevitably outsource part of their tasks overseas. And for those who don’t, there is still a huge number of e-commerce stores that regularly communicate and transact with international suppliers.
Unfortunately, due to existing regulatory frameworks, sending money overseas takes a long time. In fact, it can take as long as 5 working days. This is where cryptocurrencies come in, improving international trade at all levels. When paying your international partners with crypto, transactions are delivered instantly, since no third party has to review and confirm your payment. While Bitcoin may be a rather volatile option for such transactions, Stablecoins make an excellent alternative to FIAT currencies.
Open up to new audience segments
The crypto industry has a large and loyal following of passionate investors. And this group of people can act as a great (and free) promotional method for your store. By letting the world know that you accept Bitcoin for your products or services, you open up your offer to this audience. Most stores that accept crypto are then placed in popular lists that are viewed by thousands of crypto enthusiasts so that they can choose where to spend Bitcoin. They also become small scale celebrities. Take Tahini’s Restaurants for instance. The Canadian fast-food franchise converted part of its cash reserves into Bitcoin and started preaching about it on Twitter. This resulted in more than 2000 likes and a lot more work for their business.
As a small company that started in London Ontario Canada we operate 4 corporate locations and 3 Franshise locations about to open up in Ontario. We just converted our entire cash reserves that were originally used as savings into #Bitcoin
Time for thread 👇🏽👇🏽👇🏽
— Tahinis Restaurants (@TheRealTahinis) August 18, 2020
Keep in mind that you don’t need to actually receive cryptocurrency for your products or services to make this work. All you need to do is offer to others the possibility to pay with Bitcoin. You can still receive payments in your local currency.
Get paid in your local currency
That’s right, you can in fact continue getting pain in USD, EUR, or any other currency you are currently using, while customers pay for your products and services using crypto. This is possible thanks to cryptocurrency payment widgets (or payment processors) which started to increase in popularity last year.
The concept is simple. Please the widget in your e-commerce store, and allow customers to select Bitcoin, Ethereum, or other cryptocurrencies as their preferred currency. Once they make a payment, the amount is automatically converted into your local currency and placed in your account. This way, both parties are happy.
Obviously, when choosing the do your transactions this way, you will need to pay a small fee to the widget provider, but the amount is not bigger than any other payment system. The best options currently available are those offered by Coinbase Commerce and BitPay.
Great way to protect your cash reserves
Adopting cryptocurrencies does not only mean accepting them as a payment option. It can also strengthen your business against economic uncertainty. This is, at least, what a number of different companies believe, as they are actively investing huge amounts of money in Bitcoin.
- Microstrategy, a software development company, invested more than $400 million dollars of its cash reserves into Bitcoin over the course of the past few months. According to Michael Saylor, the company’s founder, the popular cryptocurrency offers a much better return on investment compared to cash, given the expected inflation rate of the US dollar.
- Grayscale Trust has invested even more. By holding approximately 0,4% of the total Bitcoin supply, the company offers a large range of financial services to people who wish to be exposed to Bitcoin as an investment option. The company also holds a significant amount of Ethereum tokens.
And that’s just two of the many companies that seem to have realized about Bitcoin’s potential in the long run. As we are still early in the industry’s growth curve, we can expect many companies to follow by example, increasing awareness and demand for cryptocurrencies. If this were to happen, the levels of mainstream adoption would naturally increase. And with it, the benefits for business owners.