Posted By Raj Singh on 03/22/2018 in Business

Should your small business start accepting bitcoin?

Should your small business start accepting bitcoin?

Business is all about keeping up with industry trends, and there's nothing making more news than bitcoin right now. It's also proving to be a disruptor of sorts: ICOs are now a thing, as are bitcoin payments.

The latter might seem like an outlandish idea, but it really is picking up steam across the world. Bloomberg reported that the number of people owning bitcoin increases everyday, powered by its meteoric rise in value from $1000 to over $15000 in 2017. Despite its crazy fluctuations, more and more businesses are taking this opportunity to draw in more buyers by integrating bitcoin as a payment alternative.

The popular travel service Expedia, for example, allows booking hotels with Bitcoin, while Microsoft allows you to buy some games from its store with the currency. Even major payment processor Stripe supports bitcoin payments, which shows how popular the currency is becoming.

So is it time to start accepting bitcoins as a payment alternative for customers?

Yes, if the benefits are to be considered. Bitcoin payments don’t require major tweaks to your website’s theme, so you won’t go through intensive trouble integrating them. Unlike conventional payment service providers such as PayPal, bitcoin also has no fees for basic transactions, so you and your customers won’t have to pay more to get less.

In what is most likely the greatest feature about bitcoins, there are no reverse payments. Even when the buyer doubts their purchase two minutes after the transaction, they can’t get their payment back. Small business owners know that reverse payments can hurt their balance sheets in the long run, so this is a good alternative.

The speed of bitcoin transactions also makes it a worthwhile alternative for both businesses and customers. On a good day, bitcoin payments are received immediately, notably if the network is fast enough.

Additionally, you don’t have to worry about currency to currency exchange, because bitcoin is like a universal dollar and is accepted in over 61 countries. You can also withdraw your money from over 2000 ATM machines in those countries.

But bitcoin payments do come with a few downsides too.

For some businesses, bitcoin payments are impractical. Yours might be one of them. This is because of network issues, which, now because of the currency’s popularity have become more prevalent. Transactions are supposed to be basic and free, but with slower networks, buyers may be forced to ay a transaction fee of over $55 to speed things up. For a simple purchase of $10 or less, bitcoin becomes an impractical alternative.

Bitcoin presents small businesses with a problem as a result of its ever fluctuating value. In 2017, bitcoin made a huge jump in value from about $1000 to over $15000 within a few weeks, and then went down over 10% a few months later. Such jumps in value are distracting, and may expose a small business to terrible losses. Experts have forecasted a massive drop in value in the future as many continue to call the currency a ‘bubble’.

Bitcoin is not yet regulated by any major financial board, which limits its legality as a proper medium of exchange. If bitcoin is not recognised in your country, the bitcoin you accumulate from payments for your product or service may not benefit you much. Strong jumps in value haven’t convinced financial authorities yet that bitcoin deserves legal financial tool status, so it’s not yet completely safe to use.

So, what’s our final take on the issue?

We believe that small businesses should be flexible and keep up with trends as they come. Bitcoin payments are becoming more mainstream, and bitcoin users are growing in numbers. Small businesses should take up this opportunity, but tread carefully to avoid common mistakes.