Bitcoin is now more than a decade old. This cryptocurrency price has been increasing over the years. But before accepting Bitcoin payments in your small business, you want to know their advantages and disadvantages.
For some people, accepting payments made through cryptocurrencies might not be a sensible move. Nevertheless, small business owners should consider these pros and cons before deciding whether to take this cryptocurrency or not.
Advantages of Bitcoin Payments
Cross-border payments for businesses are slow, with options like checks and banks taking several days. And some countries don’t accept all payment options. However, Bitcoin allows people to send and receive money from any part of the country.
That’s because it’s a peer-to-peer payment method. And no third-party is involved in this system. What’s more, Bitcoin transactions take minutes. All a user needs is a digital wallet.
Low Transaction Fees
The transaction fees for other methods are high. For instance, PayPal can charge more than 4%. Payment processors also charge setup fees or transaction fees that they include in every completed payment.
Bitcoin exchanges, on the other hand, charge less than 1% per transaction. And peer-to-peer transactions do not involve any fee. All a user needs is a crypto wallet.
With most payment methods, small businesses face the chargeback danger when receiving money via credit cards. With Bitcoin, however, this is not an issue for concern. That’s because third parties can’t return payments. Only the merchant can decide whether to return the money.
Bitcoin Can Be an Investment
Many people are using platforms like Crypto Code to purchase and sell Bitcoin. Such platforms help people that want to use Bitcoin as an investment but don’t know much about it. For more information you can visit icorating.com
A small business can allow customers to pay via Bitcoin and then convert the cryptocurrency into fiat money. Alternatively, the enterprise can hold Bitcoin indefinitely and wait for its price to increase. The business can store the value and then sell Bitcoin later for a profit. Although this might attract taxes for capital gains, the company can’t pay them until it sells the asset.
Inflation Doesn’t Affect Bitcoin
Inflation leads to loss of value for fiat currency. That’s because a government can opt to print more of it, occasioning a value loss over time. But, Bitcoin has a limit of 21 million. That means its capacity is limited. Consequently, Bitcoin limitation may be the hedge against inflation.
People in the older generations know how to diversify their assets. And many investors always live by this is a philosophy. And this meant that people held currencies for several countries and exchanged them on various international exchanges.
Bitcoin adds to this diversification. And Bitcoin holders can use this currency as an investment and for payment.
Disadvantages of Bitcoin Payments
Cryptocurrencies are unregulated. Authorities across the globe are looking for ways to regulate cryptocurrencies. But up to now, various market forces influence the Bitcoin price. And this price varies wildly. If Bitcoin’s price drops before you exchange it for fiat money, you could lose value.
Hackers have made away with a significant amount of money after hacking crypto exchanges. Bitcoin may seem like a secure payment method. However, users should be cautious and use reliable and safe crypto exchanges. They should also store their Bitcoin in the safest digital wallets.
Unrecoverable Wallet Addresses
If your small business loses the digital wallet’s key, recovering it is impossible. That’s because cryptographic access or wallet addresses don’t have a central record. Only the wallet has the access key. That means you must safeguard it. And if you lose your wallet, you also lose any Bitcoin in it.
Bitcoin payments have pros and cons for small businesses. Therefore, do your due diligence before starting to accept this cryptocurrency as a payment method.