As a merchant, most of your time and effort goes toward optimizing your products and services. You also need to ensure that you are providing these things in a way that is convenient for your customers, which means accepting payment methods they want to use. Companies that don’t keep up with changing technologies tend to go out of business.
For example, in the previous century, almost all transactions were handled by cash or check. As credit and debit cards grew in popularity, innovative merchants quickly began accepting them. Many businesses (especially small and midsized businesses) were resistant to this advancement and suffered or died standing on legacy technology. Today, it has become clear that there is a new payment technology, and the merchants who are early adopters will have an advantage in the marketplace.
Bitcoin is used by millions of individuals and accepted by a growing number of businesses, both brick-and-mortar and online. An HSBC survey found that 36% of small-medium-sized businesses accept bitcoin. Avoiding this latest evolution of payment technology is not something most merchants can afford to do. The cryptocurrency space is crowded with solutions to suspected problems, solutions to real problems, and solutions to manufactured problems. While it is impossible to know what the future of this technology will offer, today, it seems evident that focusing on bitcoin is the best path forward for most merchants.
Popularity and Name Recognition
Bitcoin is the most popular and recognized option for the general public. Virtually every business that accepts any crypto payment will accept bitcoin, and with good reason. As the original cryptocurrency, it remains the best known and most widely used, so it just makes sense as a place for merchants to start. I firmly believe that an unignorable portion of the population will favor businesses that accept bitcoin.
Avoid Scams Found with Other Cryptocurrency
While it can be tempting to accept a variety of other digital currencies alongside bitcoin, that does introduce significant risk. There are thousands of coins and tokens, but none of them have a relatively long history of bitcoin. In addition, since bitcoin is not owned by a government, company, or individual, it is not susceptible to scams or mistakes that tend to plague other cryptocurrencies.
Hundreds (if not thousands) of cryptocurrencies, including “top 10” examples like Terra Luna, have failed for one reason. As a business, introducing that level of risk is one most are unwilling to accept. Focusing strictly on bitcoin allows you to enjoy the benefits of receiving a better form of money while minimizing the risks.
Established Layer Two Solutions (Lightning Network)
One of the biggest complaints that those who are just learning about bitcoin have is that transactions can take too long to finalize (up to 10 minutes in most cases). The reality is, however, that thanks to established layer two solutions like the Lightning Network, that is not the case. When using the Lightning Network, a transaction will go through almost instantly. There are other services out there that allow bitcoin transactions to complete exceptionally quickly as well, such as Liquid. It is also important to remember that bitcoin is fully settled at the end of that 10-minutes. In 10-minutes, you have full payment settlement. No other bank or financial institution can provide that.
Reduced Fees (Even Compared to Credit Cards)
Another common concern that merchants have when considering bitcoin is the transaction fees. When using Lightning Network, the transaction fees are essentially zero. Even if you have the transactions going through on the bitcoin blockchain, the fees will typically be significantly lower than what you will have to pay to accept credit or debit card payments. This is especially true if you perform high-value transactions since bitcoin fees are a flat rate (based on network congestion). In contrast, credit and debit card fees are typically a percentage of the total transaction amount.
Options to Hold or Easily Convert to Fiat
Accepting bitcoin as payment will allow you to either hold it and utilize its suspected store of value property or convert it into your local currency immediately. Suppose you aren’t interested in bitcoin as an asset. In that case, you can use a service that will allow you to accept it for payments, and at the moment of the transaction, it will convert it to your fiat currency, so you never actually hold the bitcoin. This arrangement does come with fees and risks outside of the bitcoin network.
If, on the other hand, you want to hold your bitcoin just as you would cash in a savings account, you hold onto the bitcoin for as long as you would like. If you do this correctly, you can avoid custody fees and further reduce risk. Many merchants use this as a simple way to grow the amount of bitcoin they hold for the future.
Simple Global Payment Acceptance
Throughout human history, most businesses would only serve their local community. Thanks to the Internet, there are more businesses with customers around the globe than ever before. If you want to be able to do business with people around the world quickly, you need to be able to accept payments from them. While you could require that customers convert their local currency into yours, or vice versa, it is often easier to accept bitcoin.
Bitcoin can be sent and received by anyone regardless of their physical location. No extra fees or other issues are associated with conducting a bitcoin transaction across international borders, making it an obvious solution for many merchants. Imagine a business in Montana selling services to customers in Peru, Egypt, Sweden, and Australia, and they never have to think about local currencies.
While bitcoin is fairly slow to evolve relative to other public software, the technologies that use bitcoin are pretty innovative. This balance allows you to confidently accept bitcoin, knowing that it will be here long into the future while also taking advantage of the innovation in the fintech space. Whether you have purchased bitcoin in the past or want to use it to remain competitive in your industry, having your fingers on this evolving technology will be very important for most merchants.
Is Bitcoin Right for Your Business?
While there are many benefits to accepting bitcoin as a merchant, it may not be for everyone. Each merchant must balance the advantages of accepting bitcoin with the amount of work it will take to begin accepting it and taking care of it. Fortunately, there are many services out there that can allow you to incorporate bitcoin payments into your business seamlessly.
Whether you decide to start accepting bitcoin payments today or want to delay it for a while as the industry matures, it is crucial to keep up to date on your options. Before onboarding your business, you can find a local bitcoin meetup in your area. There you will be able to practice buying and selling goods with bitcoin. A growing number of people worldwide recognize bitcoin as the next significant technological advancement in the payment industry, and those who aren’t ready for it will be left behind.