The trend of businesses accepting cryptocurrency as a means of payment was super charged in 2020 when Elon musk announced that Tesla would accept Bitcoin for payments. In typical cerebral fashion, he later backtracked citing now-debunked environmental concerns. He left the door open for crypto regardless, noting that Tesla would “most likely” accept Bitcoin again in the future.
But while the machinations of this tech entrepreneur take the limelight, crypto adoption has been rocketing since its inception.
A Deloitte study from late 2020 found that more than 2,300 US businesses currently accept Bitcoin. That number is expected to grow world wide, but especially in the United States. A recent survey by Insider Intelligence found that cryptocurrency usage likely rose as much as 70% in the US in 2022.
While it cannot guarantee a loyal customer base, the “Bitcoin accepted here” stickers will boost your business prospects, opening up an additional revenue stream that’s free from government dictates. Should you consider it for your businesses? There are several good reasons to accept crypto for payment!
Lower Transaction Fees
Many small business owners must contend with credit card fees if they want to offer this convenient for of payment to customers. International payments have even higher fees associated with them. But since cryptos like Bitcoin and Litecoin are decentralised money, transaction fees are always lower across the board – and international fees are competitive to domestic fees.
One of the biggest headaches in working with international customers is processing transaction delays. With Bitcoin and Litecoin payments, these delays are non existent, and payments are faster. With the addition of Lightning network payments, transaction costs are even lower and Litecoin’s MWEB addresses also add privacy in the mix.
Credit card payments increase risks for small business owners. A customer can use a credit card to make a payment, receive the item, claim the product is not good and demand a ‘chargeback’. Chargebacks are often used in credit card fraud and can be a nightmare for small businesses. The money will be refunded to their credit card, and your business could be penalised by your payment processor. If a business is targeted and chargebacks increase on your account, your processing company could refuse to do business with you.
Bitcoin and Litecoin carry none of these risks. Customers who don’t have money in their crypto account can’t make a purchase – end of story.
In addition to avoiding chargebacks, crypto is order of magnitude more secure than credit cards or bank accounts. Every transaction is stored on an immutable blockchain that has built-in audit functions. Proof-of-work blockchains have high security and accountability by design.
Censorship Resistant Money
The year 2022 reflected poorly on payment processors and governments. Institutional trust has all but been destroyed following alarming stories where ordinary people’s money was frozen. In Canada, citizens who held a different political viewpoint had their funds frozen by the government in February. PayPal also has a history of freezing funds of users who hold certain beliefs.
Concerning developments suggest that various countries are willing to burn entire economies to the ground in an attempt to maintain control of the money supply. But censorship resistance is necessary for an open, fair and public financial system. In theory, public servants in government should welcome this technological revolution with open arms!
Counter Worrying CBDC roll out
Governments around the world are developing Central Bank Digital Currencies (CBDCs). Every version of these tokens compromises on the basic principles that make money attractive to use. These are fungibility, censorship resistance and a hard limit on the money supply. The European Union is set down the path of CBDCs too, and there is a laundry list of reasons why you will personally be negatively affected if alternative monies are attacked or outlawed.
Keeping a stash of crypto provides an alternative, independent monetary rail should the European Central Bank (and others) become more like Communist China.
Reflects Well on Your Brand
Crypto provides a tech-savvy, cutting-edge payment system. If you begin accepting crypto in the depths of the bear market, your business will be ahead of the curve. It will look good for your brand, generate great publicity and attract tech-forward customers, as well as employees, to your company.
This is a desirable outcome for every business, big or small.
What are the most popular cryptocurrencies for businesses?
Not all cryptos are created equal. In fact, the vast majority of cryptocurrencies (thousands) are either vapourware, unregistered securities, or worst of all – decentralised-in-name-only (like Solana). Bitcoin and Litecoin are by no means the only two time-tested, decentralised cryptos, but they are by far the most widely accepted and suited for businesses besides Ethereum.
Still, Bitcoin is the most widely accepted cryptocurrency, and therefore the most popular choice for online businesses. Litecoin is a good choice for businesses that want to avoid the higher fees. Alternatively, businesses can also choose one of the top stablecoins, namely USD Tether or USDC. However, these coins are tokens and suffer from the same security risks such as government crackdowns.
There are trade-offs businesses must acknowledge when choosing which currencies to accept. But overall, accepting Bitcoin and Litecoin can help businesses by providing a new revenue stream, protecting against fraud, offering a degree of anonymity while also safe-guarding human rights.