Cryptocurrencies like Bitcoin have been attracting more attention and steadily growing in prominence as a feature of the global financial system in recent years.
- Bitcoin increased in value by more than 193,600% between 2012 and 2020
- The cryptocurrency market is set to be worth more than $1 billion by 2026
- User confidence in cryptocurrencies reached 97% in 2021
- The market capitalization of Bitcoin passed the $1 trillion mark in March 2021
Corporate adoption of cryptocurrencies has been steadily increasing too, with more than 100,000 merchants worldwide - including Microsoft, Dell and PayPal - now accepting Bitcoin. However, this number still represents a tiny proportion of the overall business community, with some 30 million small firms operating in the US alone.
So is it time for companies to start taking crypto more seriously? Here are some compelling reasons why you should consider adding the likes of Bitcoin to your list of payment options.
1. Cheaper payments
One of the clearest motivations for businesses to get on board with cryptocurrencies is to save money. The fees you pay to take crypto payments are much lower than those incurred by traditional debit and credit card transactions, since digital currencies aren't processed by banks or centralized financial institutions.
This could be a particularly compelling advantage if you do business in different countries. Sonny Singh, chief commercial officer at BitPay, told the International Business Times that cross-border payments is one area where companies could see "huge benefits" from Bitcoin. He said the cryptocurrency could save these firms "a lot of money".
2. Access to global markets
If your firm has ambitions to expand into international markets, using cryptocurrencies could make them easier to achieve.
The cost and complexity of processing international payments are common barriers to overseas growth for many firms. When you're dealing with traditional transaction types, you have to account for factors such as foreign exchange fees, currency fluctuations and slow processing times.
Cryptocurrencies don't fall under the authority of any individual government or central bank, which makes them ideally suited to real-time payments across international borders that can then be converted into local currencies. This is a big plus if one of your company's biggest ambitions is to tap into international markets and introduce your products to an entirely new audience.
3. Stronger security and lower risk of fraud
A key element of cryptocurrencies such as Bitcoin is blockchain: a record-keeping technology that serves as a decentralized ledger for all payments, meaning no individual or group has control over it. The data entered and stored in a blockchain is permanent and can't be changed, which means there will always be an immutable record of every transaction that takes place.
As well as promoting visibility and aiding accurate record-keeping, this helps to reduce security risks such as chargeback scams, where fraudsters make a purchase on their own credit card and then attempt to get their money back from the issuing bank. If the claim is successful, it's often the merchant that has to cover the cost of the refund.
If you're using cryptocurrency, the blockchain will provide a public record of every transaction, reducing the risk of data being distorted and manipulated.
4. Data privacy
In the current age of GDPR, CCPA and other data privacy regulations, consumers are becoming increasingly aware of the value of their personal information and the importance of managing it properly.
Another big benefit of the technologies that facilitate cryptocurrencies is the fact they allow totally anonymous transactions, with no personal information being transferred. This is markedly different to debit and credit card payments, which require a large amount of sensitive buyer data to be shared with the merchant.
For customers who have raised concerns or asked questions about what you're doing to keep their sensitive details safe, the option to make secure, anonymous crypto payments is likely to be a welcome one.
5. Keeping up with an undeniable trend
Steadily increasing familiarity with cryptocurrencies and interest in using them is a trend businesses can't afford to ignore. If you're too slow to make the transition to crypto payments, you could soon find yourself falling behind your competitors and out of touch with the expectations of your customers.
Recent research by Mastercard on the growth of emerging payment types showed that cryptocurrencies were "gaining ground" among consumers, with millennials in particular "primed to jump in". Four out of ten survey respondents (40%) in North America, Latin America, the Middle East, Africa and the Asia Pacific region were planning to use a cryptocurrency in the next year. Two-thirds (67%) of millennials worldwide said they were more open to crypto payments than they were a year earlier.
Adding the likes of Bitcoin, Ethereum and Stellar to your accepted payment types will show customers that you're up to date with cutting-edge trends and ready to make changes that reflect their preferences.