To crypto or not to crypto: Should your business start accepting crypto payments?

While traders and investors are busy trying to work out how to increase their profits, keeping close track of the live price Bitcoin, and wondering whether they should buy it, sell it, or hold onto it indeterminately, in the business realm, another crypto-related dilemma is giving entrepreneurs some serious food for thought – that of accepting (or refusing) cryptocurrency payments from customers. A lot of business owners find themselves torn between following the lead of the over 15,000 companies worldwide that have already integrated crypto payments into their systems or sticking to their existing setup. 

This state of indecision is perfectly understandable given crypto’s complex nature and the many aspects and implications to take into consideration before implementing crypto payments into the checkout process. On the one hand, embracing digital assets for transactional purposes can offer companies a host of benefits and make them stand out for their future-oriented approach. On the other hand, cryptocurrencies are known for being unpredictable and rank high in terms of risk, which can pose a series of issues for businesses. 

The majority of crypto-friendly enterprises typically accept Bitcoin as the sole form of crypto payment, due to the asset being the oldest and most established of its kind, but certain platforms also enable purchases via other top digital currencies like Ether or USDC. 

With crypto becoming more integrated into mainstream finance, you might feel the pressure to fall in line, but are crypto payments a good idea for your business or not? The only way to figure this out is to take a hard look at what’s prompting businesses to consider this new medium of exchange and what’s keeping them from taking the leap, and then decide which factors weigh more heavily in your case. 

Reasons to accept crypto payments 

By including crypto assets among their payment options, businesses can enjoy the following advantages. 

Keep up with emerging trends

In the business space, keeping up with changing trends is not a matter of choice but of survival. If you ignore what’s going on around you or take too long to adapt to new market conditions, you risk losing your customers and, eventually, your business. This doesn’t mean you should blindly follow trends and copy what everyone else is doing. 

However, if the needle seems to point in a certain direction, you might want to look towards it and see what’s happening there. Right now, all the signs seem to indicate that cryptocurrencies are on their way to becoming a normal way for consumers to pay for goods and services. Although it comes with greater risks, adopting this trend early on also offers greater rewards as it can help your company establish itself as an innovator and gain a competitive edge. 

Cater to all types of consumers 

By the latest estimations, almost 10% of adults worldwide currently use cryptocurrencies and less than 1% of the global population held Bitcoin in 2023. While these might not seem like very big figures, they translate to a total of 560 million cryptocurrencies users and almost 81 million Bitcoin users. In the US, reports show that 16% of Americans have made at least one purchase using crypto, while 34% of them have a high interest in crypto payments.  

This means that by offering crypto as a payment option, you’ll be able to expand your customer base and reach a wider audience that includes people who are willing and eager to use their crypto funds to do their shopping. This could easily increase sales and boost your company’s bottom line. Statista also reveals that crypto payments are expected to grow at a CAGR (Compound Annual Growth Rate) of 17% by 2029, reinforcing the belief that there’s a lot of untapped potential in this payment method. 

Near-instant payments 

Tired of waiting for days for a payment to come through because of intermediaries or dealing with cumbersome currency conversions and additional costs when it comes to international transactions? Adding crypto to your payment infrastructure can solve both of these problems. 

Digital currencies can be transferred from one party to another without the intervention of third parties, reducing processing times and ensuring speedy transactions regardless of location so you can receive the funds into your account without delay. 

Lower fees 

With payment processors and intermediaries out of the picture, your business can also benefit from reduced transaction fees. With fiat currencies, payment providers usually charge between 1.15% to 3.15% per transaction, but in crypto’s case, these fees can be much lower than that or completely inexistent. Think of all the money you’d be saving by introducing crypto to the payment mix and eliminating at least a part of the fees that you have to pay at the moment, especially if you offer products/services overseas.  

Secure and irreversible transactions 

Another notable advantage of using crypto for collecting payments from customers is their enhanced security levels. Being powered by advanced blockchain technology, digital currencies are inherently more secure than fiat transactions, therefore the risk of fraud or data breaches is greatly reduced. Since crypto trans are also irreversible, you won’t have to worry about fraudulent chargebacks either. 

Challenges to consider 

If incorporating crypto payments into a business would be a simple and trouble-free process, this would already be a commonplace practice. But as it is, there are also drawbacks that come into play, and one of the biggest challenges is represented by the volatile nature of digital currencies, with crypto prices often surging or dropping dramatically in a matter of days or even hours. Merchants have yet to find a viable solution that could help them manage this level of unpredictability and accept crypto funds while also protecting their profits. 

It's also important to mention the tax implications that come with crypto payments. In the US, applicable law stipulates that companies that receive crypto assets from clients need to report it as gross income to the IRS and thus pay capital gains tax. Legal provisions also mention that enterprises have to keep track of the crypto prices at the time they were received and sold, adding a new layer of complexity to tax calculations. 

Integrating crypto as a means for payment is a complicated matter, presenting both advantages and disadvantages. It’s therefore necessary to assess your company’s needs and familiarize yourself with the pros and the cons so you can make a fully informed decision.