Cryptocurrency is a digital currency secured by cryptography that is now being distributed. Instead of utilizing a third party, like a bank, cryptocurrency uses a process called mining—where miners add individual blocks to the blockchain after they solve a complicated mathematical equation. Inside these blocks are thousands or millions of cryptocurrency transactions.
One of the most popular cryptocurrencies is bitcoin, the first cryptocurrency that ever existed. The creator, Satoshi Nakamoto, has the goal of addressing economic problems at the time of a financial crisis. By distributing the network, people don’t need to worry about losing their money when a third party fails or goes bankrupt.
The popularity of bitcoin has skyrocketed since its creation. Today, teenagers and multibillionaires alike invest in cryptocurrency. And it’s not long until digital coins become a standard in the realm of business. Keep reading to find out about the advantages of using cryptocurrency for small businesses.
Cryptocurrency as an alternative payment method
More and more people are now using bitcoin and other virtual coins for transactions. So, adding cryptocurrency as a mode of payment for your business proves to be a smart move, especially now that crypto adoption is already happening in 55 countries.
Offering different payment options benefits both the business and the customer. It prevents shopping cart abandonment by increasing your chances of giving the customer their preferred method of payment.
People have varying preferences in this area due to trust issues, fees, and overall accessibility. By offering as many options as there is, you’re opening your business to a bigger audience. People of different preferences could become attracted to your business just because they like the convenience of paying you.
Instant transactions and more affordable transaction fees
Transactions through third parties are subject to processing fees and periods. They charge different percentages depending on the amount, the type of transfer, and whether the transaction is local or international.
Payments using bitcoin and other cryptocurrencies are free from those delays because transactions happen almost immediately. Once a customer or client sends over their payment, it will reflect in the wallet, and the money becomes ready to use.
The cheaper transaction fees and absence of bank fees also allow small businesses to maximize their budget, and this is extremely beneficial to them. Over time, third-party processing fees can accumulate into a substantial amount of money that could have gone to funding the business and its growth.
Convenient international transactions
Other than processing delays and fees, cryptocurrencies make international transactions a breeze. For instance, bitcoin remains bitcoin anywhere in the world, and its value is more or less the same wherever you complete your transaction.
Businesses are not subject to conversion rates for cross-currency transactions with virtual coins. As a result, businesses save more money, as they don’t have to deal with drastic changes in exchange rates. Moreover, some third parties also follow lower conversion rates, causing business owners to incur losses.
The convenience of international transactions opens the business to a global market. Bitcoin eliminates the hassle of cross-currency transactions which often stops customers from supporting a brand.
Cryptocurrency is huge on privacy and security
People who are unfamiliar with how bitcoin or cryptocurrencies work would often question its security and privacy. But these are exactly two things cryptocurrencies are good at.
First off, nobody can access your crypto wallet except for you. Users also don’t need to share personal information such as bank account number, credit card number, address, phone number, etc. So not only is a customer’s identity kept private, but it’s also hard to trace them. Moreover, the blockchain prevents duplicate transactions and other security issues that could arise from using digital cash.
Businesses can also rest easy when it comes to cancellations. With bitcoin, financial transactions are final. A client or a customer can’t revert it when they change their minds or when they’re simply trying to trick you.
The Key Takeaways
Bitcoin carries so many features that are beneficial to small businesses. For the most part, it can be used as an additional mode of payment for customers to have more options. In addition, it gives customers the chance to have a faster and easier checkout experience since they can choose their preferred payment method.
As a result, businesses can save precious time and money by avoiding hefty bank processing fees, delays, and fluctuating exchange rates for foreign currencies. All these resources that companies have saved can instead go to the business’s survival, growth, and cash flow.
On top of this, small businesses can enjoy instant and direct transactions without compromising their and the customers’ safety and privacy. Customers remain anonymous, as their information is not disclosed—increasing the trust between businesses and customers. Businesses can also enjoy their peace of mind, knowing that they are protected from fraud or cancellations.