Should Businesses Accept Bitcoin as Payment?
With every small and big business being hit hard due to the pandemic and with Hawaii welcoming crypto trading back with a new regulatory sandbox, we believe this is the right time for all the businesses to accept cryptocurrencies.
With Bitcoin reaching several new all-time highs since the beginning of 2021, entrepreneurs have started wondering if failing to adopt the cryptocurrency as a payment option could result in a missed opportunity or even compromising business growth in the medium to long-term. Unlike what investor witnessed with the 2017 bull-run the reason for the price surge this time around does not seem to be based on hype, but instead, as explained by Geton Ecosystem’s CEO, Milan Kozlevčar: “Amidst the current Covid-19 crisis, people are looking into means of investment that yield better returns compared to savings in bank deposits.”
Although it is not yet a ‘thing’ here in Hawaii, a growing number of businesses around the world have started accepting payments in Bitcoins and other cryptos, most of the time utilizing a hybrid of crypto and fiat payments with Bitcoin remittances settled with the support of a corresponding processor. Microsoft, Wikipedia, AT&T and many other big companies have started the adoption of BTC (symbol for Bitcoin) payments, together with nearly a third of small and medium businesses in the mainland U.S. Some banks have also started accepting Bitcoin as a deposit method, and Bitcoin ETFs (Exchange Traded Funds) are common investments nowadays. By the way, soon enough all U.S. banks will be adopting the crypto blockchain as a means to transacting and keeping ledgers to manage their customers’ assets. This will surely push for an eventual mass adoption of crypto transacting and trading.
However, besides the clear choice to use Bitcoin as a payment method to facilitate business growth, there are other ways it can help expand your business.
Advantages Brought by Accepting Bitcoin Payment for Small Businesses
For some small businesses, accepting Bitcoin might not make much sense for one reason or another, however, the following benefits may be also worth considering.
Cross-border transactions are not slow — Businesses that accept payments internationally have few options. Most of them are slow. Bank wires can take days. Money remittance can take up to a week. Checks are inefficient. And most online payment systems such as PayPal are not accepted in every country.
Accepting payments in Bitcoin opens up a new world of possible leads. It’s no wonder businesses selling internationally will prefer to use Bitcoin — for the reasons stated above and others — and some of your customers will search for a competitor accepting this form of payment if you are not. It makes sense to add Bitcoin to your payment options for international and domestic clients, as there are cost savings and the added security to be gained by doing so. While an international wire transfer might take days to get to you, a BTC payment takes from five minutes to an hour (which depends on something called “miner’s fee”, where the higher, the faster the transaction).
All you need is a Bitcoin wallet.
No charge backs. Ever! — Merchants are always subject to credit card charge backs. That is not the case with Bitcoin. Since it is peer-to-peer, no third party can return the payment to the customer. This decision falls to the merchant alone to be made.
Much lower fees — One advantage of using Bitcoin is that the fees for payment are progressive. Whereas some card-payment fees can eventually become extortionate and work against you in your strive for growth, Bitcoin offers a varied selection of fees so you can control how much expenditure you incur.
Furthermore, there is no fee for accepting Bitcoin. Other payment methods have huge transaction fees. In comparison, PayPal’s fees can be over 4%. Many payment processors have setup fees and include a flat fee per transaction in addition to a percentage of the transaction. Small business merchants can find Bitcoin exchanges with fees under 1% per transaction. If payment is peer-to-peer, there is no fee at all. However, you may have to purchase a crypto wallet.
Monetary + investment diversification — Older generations have already been trained to diversify assets. Many investors live by the philosophy. Until now, monetary diversification meant holding several national currencies and engaging in foreign currency exchange. Thanks to Bitcoin, monetary diversification now includes a type of currency that can be used both as a form of payment and as an investment class that stores value.
Media & Community Awareness — More than any other currency, Bitcoin and cryptocurrencies generate publicity. The mainstream and other press talk about Bitcoin as it remains new and somewhat mysterious, and is misunderstood by many people. By dealing in Bitcoin, you have an additional marketing point to make and can enhance your brand awareness by positioning your business as the forward-thinking one in your area of industry or commerce. This is potential free advertising, simply due to accepting and using Bitcoin.
Bitcoin is also an investment — A small business can accept Bitcoin as payment and convert it the same day to fiat currency, but it isn’t required to do so. Bitcoin can be held indefinitely, and if the value increases over the amount of the payment received, that value is stored until the Bitcoin is sold or the market turns. While this could result in capital gains taxes, those taxes do not have to be paid until the asset is sold.
Millennials are hip to Bitcoin — While many older people are averse to new technologies, especially cryptocurrencies, younger generations are more accepting. In many cases, they prefer it. A business that caters to younger people could benefit by expanding customer payment options.
Bitcoin may be a hedge against inflation — Fiat currency loses value over time as more is printed. Bitcoin has a cap of 21 million, which means it has a limited capacity. This limitation may make the value of Bitcoin is a hedge against monetary inflation.
The Disadvantages of Accepting and Using Bitcoin
While there are many upsides to accepting Bitcoin for small business payments, there are some potential downsides. Consider these:
Market volatility — There is no regulation of cryptocurrencies. Around the globe, authorities are discussing how to implement sound regulation, but, as of now, market forces dictate the price of Bitcoin and there is wild volatility from day to day. If the value of Bitcoin goes down before your small business exchanges it for fiat currency, you could lose money on the sale.
Security concerns — Cryptocurrency exchanges have lost millions of dollars in hacks. While Bitcoin is more secure than some payment methods, caution is advised, and experts warn that the safest and most secure storage is offline in what is called a paper wallet.
Every transaction is public — Bitcoin transactions are recorded on a public ledger. This ensures transparency, often considered a Bitcoin payment benefit. However, because each transaction is recorded on a public ledger that anyone can see, if a wallet address identification is leaked or hacked, that’s a major security concern. The onus for protecting that information is on the wallet owner.
Wallet addresses are unrecoverable — If a small business merchant loses the owner access key to their wallet, those keys are not recoverable. There is no central record of wallet addresses or cryptographic access keys. The only person who has it is the wallet, and that means it must be safeguarded. If your wallet is lost, any Bitcoin stored in the wallet is gone forever.
Just how complicated is it to start accepting crypto payments in Bitcoin? If you only have a small volume of potential Bitcoin payments to be received, the easiest way to accept BTC would be to ask your customers to transfer the money directly to your Bitcoin wallet. This can be a wallet address from an exchange like Gemini or Coinbase or from a simple digital wallet (available for mobile devices and desktop computers alike) such as Mycelium, Exodus or the classic Blockchain.com.
The wallet address can be integrated to your business website and payments can start being received right away.
Bitcoin has taken over the cryptocurrency market. It’s the largest and most well-known digital currency today, but just how many large companies are accepting Bitcoin as a legitimate source of funds?
Companies Currently Accepting Bitcoin as Payment
- Amazon (indirectly)
- Burger King
- Dallas Mavericks
- Miami Dolphins
- Norwegian Air
- Pizza Hut
- Sport Lisboa e Benfica
- The Internet Archive
- The Pirate Bay
- Virgin Galactic
Stores Currently Accepting Bitcoin as Payment
- A Class Limousine
- Alternative Airlines
- Amagi Metal
- Coupa Café
- Dish Network
- Dream Lover
- Etsy Vendors
- Euro Pacific
- Fight for the Future
- Gap, GameStop and JC Penney
- Grass Hill Alpacas
- Green Man Gaming
- Helen’s Pizza
- i-Pmart (ipmart.com.my)
- Jeffersons Store
- Mexico’s Universidad de las Américas Puebla
- MIT Coop Store
- Museum of the Coastal Bend
- Naughty America
- NCR Silver
- Old Fitzroy
- One Shot Hotels
- Pembury Tavern
- PSP Mollie
- RE/MAX London
- San Jose Earthquakes
- Save the Children
- SFU bookstore
- State Republican Party
- Straub Auto Repairs
- T-Mobile Poland
- The Libertarian Party
- The Pink Cow
With all those payment-processing companies, banks, industry leaders and other businesses accepting cryptocurrency, it is not difficult to see why increasingly more companies are accepting bitcoin and it is clear that the adoption of Bitcoin as a payment method will continue increasing with each year.