Crypto Payment Strategies for Small Business Growth

Small and medium businesses account for a large percentage of the economic growth index in many developing and developed economies. As crucial as SMEs are, the industry is fraught with challenges, such as international trade limitations and payment processing. These challenges have led to reduced revenue and, in worse cases, the eventual closure of the business. Thanks to cryptocurrencies and blockchain technology, there’s a ray of hope for SMEs seeking some competitive advantage in a harsh business climate. Read on to explore powerful strategies SMEs can employ to gain a competitive advantage using cryptocurrency payments. 

How Does Cryptocurrency Affect SMEs? 

Businesses of all sizes actively explore ways to minimize threats and challenges while maximizing profit opportunities. Technology has been an incredible tool for small and medium enterprises seeking to achieve the goals above, and something new is becoming the surest technological assistance. Payments, accounting, workflow management, and the work itself are predominantly digital in the finance industry.

With over 420 million holders of cryptocurrencies worldwide, small and medium-scale businesses that integrate cryptocurrency as payment gateways are expected to outperform competitors in significant business operations. 

Let’s consider some terminologies in cryptocurrencies to help you better appreciate their efficacy as a payment channel for SMEs. 

Cryptocurrency 

Cryptocurrencies are digital assets that act as digital currencies. Think of it as a digital possession that can be used to make payments, like paper currency. Bitcoin (BTC) and Ethereum (ETH) are the most popular cryptocurrencies. Many people also trade cryptocurrencies for profit using a crypto trading platform. 

Some coins are called stablecoins because their value doesn’t fluctuate like that of other cryptocurrencies. These stablecoins, such as the USDT (US Dollar Tether), are attached to fiat currencies like the US dollar, hence their stability. Cryptocurrency payments can only be performed on the blockchain, which is a game changer for SMEs. 

Blockchain

Blockchain technology is a system of interconnected computers called nodes that share the data needed to keep the technology running. This means that one person or government cannot control the technology. 

On the blockchain, an asset's value is universal, solving the problem of converting one currency to another during international trade. It also overcomes geographical limitations and time differences, making it easy for customers to pay directly to businesses without third parties like banks. This eliminates transaction costs and time lags during international payments. 

Strategies for Leveraging Crypto Payments 

Before accepting crypto payments, ensure you and your staff understand the basics of cryptocurrencies and crypto payment gateways. Here are some strategies businesses can incorporate to leverage crypto payments for competitive advantage. 

Encourage Early Adoption 

Despite the growing use of cryptocurrencies, they have yet to become a mainstream payment channel for many SME businesses. 

Businesses can encourage early adoption by offering discounts or promos to customers who use crypto payments. Early adoption can position businesses as authorities in their field, which can also serve as a unique selling point. 

Reliable Partnerships 

Reliable partnerships with secure and trusted crypto payment processors are essential to help the SME take care of accepting crypto payments and converting them to fiat money for the business. For example, working with a professional service like Chainometry Crypto Accounting or a similar provider can help ensure accurate tracking and compliance when managing cryptocurrency transactions.

From a marketing perspective, these partnerships can be leveraged to gain customer trust, primarily if the partner is already known in the industry. 

Aggressive Marketing 

Success in the business world doesn’t necessarily go to the best firm but to the firm that knows how to market its offers effectively. With an innovative payment addition like crypto payments, effective marketing helps to get word to the right audience. SMEs can use social media platforms, websites, and vantage physical locations to advertise their innovative additions.

Steps to Implementing a Crypto Payment Service 

When you decide to boost your SME’s competitive advantage with crypto payments, these steps help set up a crypto payment service. 

• Find a payment provider: Your provider’s service should have a global reach and have adequate risk control systems to secure transactions. Also, they must offer fast settlement periods, competitive fees, and useful integrations. 

• Integration: After your provider has onboarded and verified your business, the next step is integrating the crypto payment gateway on your site’s checkout or payment page. 

These integrations can be incorporated using APIs, special plugins, or any other helpful software. 

• Optimizing the payment experience: To impress customers, the payment experience has to be seamless. When the integration is complete, customers can pay through cryptocurrencies and choose which cryptocurrency they want. 

The provider is expected to show your customers the value of their purchase in their selected cryptocurrency. When they agree to pay, the provider asks the customer to send the agreed amount to a designated wallet, often requiring them to open their wallets. 

To make this easier, your provider should have integrations with popular wallet providers. You can settle processing fees with the provider or ask them to charge it from customers.

Why Your SME Should Incorporate Crypto Payments 

• Cheaper Transaction Costs 

Unlike conventional banking systems, where transactions and international payments attract significant charges, payments in cryptocurrencies are relatively cheaper. 

This is because payments in cryptocurrencies don’t require third parties. SMEs only have processing fees to cater to, and as providers keep increasing, the processing fees are expected to become even cheaper. 

• International Market Opportunities 

Geographic limitations and currency disparities are major challenges hindering SMEs from tapping into international markets. 

Due to blockchain's global coverage, cryptocurrencies allow SMEs to offer their services and products across borders — an opportunity already enjoyed by users of crypto trading platforms. 

This reach is further amplified by the emergence of crypto cards like the Bybit Card, which enable seamless spending of cryptocurrencies just like traditional debit or credit cards, increasing accessibility for both businesses and consumers.

• Protection From Fraud 

The setup of blockchain technology (the technology on which cryptocurrency is hosted makes it difficult for business assets to suffer cyberattacks.

In addition, cryptographic commands, which protect cryptocurrency transactions, provide adequate payment security. With chargeback fraud prevalent in mainstream retail businesses, SMEs can ensure no reversals once cryptocurrency payments are made. 

• Safeguarding Against Economic Meltdown 

Certain geographical regions are prone to unrest and economic crises, such as currency devaluation, which disrupt the business health of SMEs. However, storing assets and receiving cryptocurrency payments helps hedge against economic volatility. 

Possible Challenges 

With the numerous pros of crypto payments, some cons should be noted. They include: 

• Ease of payment: Although several businesses report encouraging amounts of crypto payments, the ‘one-click’ feature many e-commerce platforms have been known for has yet to be developed for crypto payments. Developers are believed to be working to replicate this feature or provide something close. 

• Value fluctuations: The price value of cryptocurrencies is volatile, which may affect the pricing of goods and services. To mitigate this problem, more businesses are encouraging using stablecoin tokens such as USDT and USDC as payment currencies. 

     • Compliance rules: The use of cryptocurrency is still evolving, and as such, policymakers          are constantly reviewing regulations for its use. This development may disrupt payment                operations. To mitigate this challenge, SMEs should consider working with rule-compliant            providers.

The Future of SME Payments 

Receiving payments in cryptocurrency is a game changer for SMEs looking forward to gaining a competitive advantage in today’s business world. With aggressive marketing, early adoption, and reliable partnerships, SMEs can often outperform competitors. Making the move to learn is the first and lasting step towards success in 

this field. Proper education on crypto payment systems is a must if you want your business to enjoy the benefits of receiving payments in cryptocurrencies while mitigating the effects of associated disadvantages.