technology
Should Businesses Accept Bitcoin Payments
21 Feb 2022
Cash and credit card payments have long been the standard payment methods for conducting business transactions between merchants and customers. This day and age, however, a new tool is rising to the ranks and that tool is Bitcoin. A decade ago, nobody knew about cryptocurrencies, much less bought, sold, or kept them. Fast forward today, everyone wants to know Bitcoin.
With growing attention around it, business owners are now facing the question - should you accept it as a valid form of payment? Here are things to consider before you make any decisions.
Some Business Expenses Cannot Be Paid With BTC
If you accept Bitcoin payments from your customers, you'll need to convert it into cash in order to use it for your business expenses. Many traditional businesses, including restaurants for example, cannot pay their employee wages, supplier fees, and lease with Bitcoin or any other cryptocurrency for that matter. In addition to having to convert BTC into US dollars, you'll need to keep careful records of the transactions in case of an audit.
Many People Still Don't Know About It
Public awareness is another hurdle when thinking about using Bitcoin or any other cryptocurrency as a payment method. Businesses that choose to accept BTC will need to invest time and manpower to help their customer base understand what and how BTC payments work. It's estimated that less than 1% of the total human population fundamentally understand what Bitcoin is or how blockchain technology works.
BTC Prices are Volatile
Just because you have $1,000 worth of BTC in your wallet today, doesn't mean you'll have that same amount of BTC the next day. The surge in price of BTC is perhaps one of the main reasons why it gained public attention in the late part of the past decade. This constant swing in cryptocurrency price can make it harder for you to price your products/services accordingly. To get an idea of how volatile cryptocurrencies are, you can check out cryptocurrency broker platforms that display pricing data at no cost.
BTC Regulations are Constantly Changing
Since it is a relatively nascent technology/asset, bills and laws designed to better regulate cryptocurrencies are still in development. Several key government officials and politicians are calling for more regulations. From a business owner's perspective, you'll need to stay up-to-date on these future changes to be able to accurately file your taxes and manage your cryptocurrency transactions.
BTC Transactions are Immutable
This may actually be a good thing from a business owner's standpoint. Many businesses are hit with credit card fraud each year. It's when they process an order and ship a product, only for the credit card payment to be reversed a few days after. With BTC, you won't have to worry about payments being reversed. That said, you will have to work on building trust with your customer base for this to be sustainable in the long run. There are definitely pros and cons to accepting BTC payments. The answer to the question of whether or not your business should accept it will depend on individual factors, including your business model, target audience, and your commitment to cryptocurrency use.
