Tesla played a significant role in solidifying Bitcoin’s legitimacy when it comes to businesses accepting crypto. The decision to start accepting Bitcoin as a payment option in early 2021 saw digital asset prices soar, and resultantly major companies like Starbucks, AT&T Mobile, and Whole Foods followed suit – not to mention entire countries (e.g. El Salvador and the Central African Republic) legalizing Bitcoin.
When the electric vehicle company backpedaled on its decision a few months later and reneged on its proposal to accept crypto, a lasting impression had already been made on the market and popular sentiment.
In the time since, adoption rates are higher than they’ve ever been, with the global crypto-holding population increasing by 178% in 2021 alone. So why wouldn’t businesses want to tap into this fast-growing demographic of potential customers?
The Benefits Associated with Accepting Crypto Payments
In the last decade, the consumer preference for using digital payments has increased, with the Covid-19 pandemic further propelling this trend. In light of the movement away from cash and toward digital transactions, it was only a matter of time before cryptocurrencies entered this equation.
Below we highlight some of the benefits that accepting crypto payments provide to businesses when compared to fiat alternatives.
Major credit card companies are known to charge 1.5% - 3% processing fees on top of the platform’s cut, while PayPal charges 1.9% - 3.5% for each transaction plus a fixed fee. Cryptocurrencies typically charge a flat rate, irrelevant of how much you are transacting. While this cost can increase when market prices fluctuate and networks get congested, Bitcoin’s fee has been under $5 for the last several months.
Credit card companies take between 1 - 3 days to settle a transaction while PayPal transactions can take up to 21 days before the funds reach a business’ account. On the other hand, executing cryptocurrency transactions are practically instantaneous, taking just minutes for the funds to clear.
When catering to an international clientele, cryptocurrencies provide the fastest and cheapest means of settling a transaction. Fiat currencies tend to go through several middlemen before reaching the final destination, incurring charges at each stop.
Due to the nature of blockchain technology, transactions are much more secure and do not require middlemen or third parties to facilitate the processing of transactions. You can learn more about how crypto transactions and blockchain technology work here.
Transactions are Final
In 2021, chargebacks cost e-commerce sites $125 billion. Unlike with credit and debit cards where transactions can be canceled after the processing has taken place, cryptocurrency transactions cannot be reversed or stopped. Once the transaction has been executed, it is final.
Increase One’s Client Base
Incorporating cryptocurrencies into one’s business allows companies to expand their client base and reach a new demographic of customers. Eric Barbler, founder and CEO of TripleA confirmed that opening up crypto payment options in one business exposed it to “over 300M crypto owners internationally that are investing or getting paid with crypto,” based on statistics gathered from 2021.
According to Crypto.com, “If we extrapolate a similar rate of increase in 2022, we are on track to reach 1 billion crypto users by the end of 2022.”
Businesses Accepting Crypto Payments
Below is an image displaying the major companies and brands around the world accepting cryptocurrencies in their businesses.
With large global brands from Gucci to the NBA to Coca-Cola becoming crypto-compatible, it’s only a matter of time before this trickles down to a wider variety of SMEs.
In light of the global movement toward digital payments, the decision of giant payment processors like Mastercard and Visa to start working with crypto is a significant testament to their confidence in cryptocurrency’s long-term viability as a global medium of exchange.
Next Steps For Business Owners
If you’re running a business and are interested in incorporating cryptocurrencies as a payment option there are a few things you need to know beforehand.
First and foremost, you will need a payment gateway: a platform that provides crypto to fiat (and vice versa) services. With many options available, this will determine the fees you pay, how quickly crypto payments can be realized in the company’s fiat bank account, and how effectively your crypto services will operate.
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