Cryptocurrency has been with us since 2009 when Bitcoin was invented. Since then, crypto has been a part of our world, powering digital universes and crypto miner games like RollerCoin that allow you to mine crypto for free. It’s now 2024, and many businesses have adopted crypto as a payment method. It is safe to say that businesses that don’t accept crypto payments are not maximizing their profit potential. But not to worry; there’s a first time for everything. This article will show you how to start accepting crypto payments for your businesses’ goods and services. Regardless of the kind of business you run, we’ll teach you everything you need to know. Consider this article the first step in accepting crypto for your business.
Why Accept Crypto At All?
If you own a business, you must already have a functional payment system you have used for a long time, so why even think of crypto? Well, here are a few reasons why accepting crypto payments for business is a good idea:
- You Can Do International Transactions
This depends on your target audience. If your customers are locals, that’s all fair and good; you may not need this advantage. What if you have customers outside your country or even continent? In that case, crypto opens up your business to the global payments market, where anyone from anywhere can pay easily with crypto.
- Transactions Are Cheaper
The typical credit card processing fee for your transactions ranges from 3% to 4%. It may sound small, but the price adds up with multiple transactions. On the other hand, crypto transactions do not typically require transaction fees, especially if you’re using a crypto wallet. The worst-case scenario is paying a 1% fee for using a payment gateway, but that’s still way cheaper than 4%, right?
- No Chargeback Fees
Chargeback fees are a business owner’s nightmare; your sale money gets returned to the customer, and your payment processor takes another cut from processing the refund. If not properly managed, such a business would run at a loss. But with crypto, you don’t ever have to worry about that. Payment is final, and there are no chargebacks or disputes.
How to Get Started With Crypto Payments
- Know How It Works
Everyone knows how cash transactions work, which is one of the reasons they’re still in use. Before accepting crypto payments for business, you should get familiar with crypto. Learn its pros and cons and how it can work well for your business. After knowing how crypto works, you must familiarize yourself with the rules governing crypto transactions in your area. For example, crypto is legal in a country like the US, but any form of crypto is completely banned in China. So, if you’re running a business in China, Algeria, Morocco, Bangladesh, Egypt, Iraq, Nepal, Qatar, or Tunisia, accepting crypto is not the way to go.
- Open a Crypto Gateway or Wallet
So, is crypto legal in your country? Good, now you need to open a crypto gateway or crypto wallet. These two things are not the same. A crypto wallet keeps your money as cryptocurrency, so all the crypto money you receive from customers is kept that way. Still, a crypto gateway gives you the extra option of changing your crypto to US dollars or whatever other currency is available.
But there’s a catch to that extra option. You may have to pay transaction fees with a crypto gateway, while a crypto wallet will not charge you any transaction fees.
- Enable Crypto for Your Online Checkout Process
Did you get a crypto wallet or a crypto gateway? It doesn’t matter. Whichever one you open, you now need to enable it for your online checkout process. This is required only if you have an online store. If you do, all you need to do is integrate crypto payments with your website. This may start to sound serious, but it’s straightforward, and there are two ways to do it;
- Open Source API
Depending on your crypto platform, it may have self-hosted wallets that you can integrate with your website using a little HTML code. This may sound like some work, but this method gives you more control and customization options; just ensure your crypto platform offers an open-source API.
- Plugin/App
Most crypto platforms have integration options where all it takes is to download a simple plugin, and everything works perfectly. These plugins cover all the technicalities; you just need to download and install them on your website. It’s a faster option but may not allow as many customizations and controls.
- Enable Crypto Payments for In-Store Shoppers
If your business is a physical store, why not let them enjoy the benefits of accepting crypto payments, too? Add a crypto-compatible QR code scanner or NFC terminal to your store for all crypto shoppers. Also, if you have a mobile POS, you can integrate crypto payments into it. Your customers will be grateful.
- Integrate Your Crypto Payment Into Your Accounting System
Just because you now accept crypto doesn’t mean your accounting has to get hit. You can easily integrate crypto payments into your accounting software so that all crypto transactions are recorded on the same platform and properly accounted for, just as all other transactions.
Conclusion
Crypto is here to stay, and it has already changed how we do so many things in our lives, including how we make transactions. With every day that passes, one more person joins the growing number of crypto users, and that number keeps going up. If you’re a business owner, it’s a good idea to get in on the action and start accepting crypto payments for your business. It would make transactions more straightforward for you and your customers and make your business attractive to more tech-aware customers. It would also reduce the risk of fraud. The benefits of integrating crypto payments in businesses are endless. There is nothing to lose, but there are many benefits to accepting crypto payments.
Are There Benefits of Cryptocurrency to Small Businesses?
Yes, small businesses can benefit a lot from cryptocurrency use. The technology allows them to make seamless and efficient transactions at reduced fees with no chargebacks. Besides, small businesses can increase their sales by offering services to international clients and enjoying additional security. Cryptocurrencies can secure themselves from hyperinflation and bank failures because they’re not regulated or linked to money.
Does Cryptocurrency Use Come With Any Risks in Business?
Yes, cryptocurrency use comes with certain risks in business. First, the lack of regulations can attract mischievous and rogue elements. There is no business protection, and every investor relies on the perceived security of blockchain technology. Second, there is the risk of crypto being hackable since it’s an entirely digital asset. Also, considering the market volatility of cryptocurrency and the vast range of cryptocurrencies to choose from, some currencies might be lost.
How Do Small Enterprises Accept Cryptocurrency?
Small enterprises can use cryptocurrency like any other currency, such as the euro or the dollar, meaning enterprises can accept cryptocurrency payments like Bitcoin, Litecoin, or any other crypto. In the United States, the IRS treats crypto transactions like property trades. The enterprise will owe tax on the crypto currency’s value during the transaction. A business must create a crypto wallet and choose its preferred cryptocurrency, such as Bitcoin.
What Does the Long-term Future of Cryptocurrency Look Like for Businesses?
The long-term future of cryptocurrency looks bright for businesses and companies in various industries. Today, most global organizations like PayPal and Tesla use blockchain technology and cryptocurrency, a sign that the future is bright. Experts predict that more companies will join this trend thanks to the many benefits that crypto use comes with. Certain regulatory authorities oppose crypto use, so the journey might take work. Businesses need to understand the risks and benefits of using crypto to be on the safe side.
Are Businesses Taxed on Cryptocurrency?
Yes, businesses accepting cryptocurrency are also taxed because taxes are on income and not payment mode. A business income includes anything that adds value to the enterprise. If a buyer pays you for other services or goods, your business will owe taxes on the payment value of those goods. The tax authority will tax any cryptocurrency payments a business receives. However, crypto payments are treated differently, and companies must report income as the fair market value of the cryptocurrency they’re using.
Does Crypto Volatility Affect My Business?
Yes, cryptocurrency volatility can significantly impact businesses that accept crypto payments. The rapid fluctuations in the value of cryptocurrencies expose businesses to potential financial risks. If the value of the cryptocurrency decreases shortly after a transaction, the business may experience a loss in revenue. Conversely, if the value increases, the business may miss out on potential gains. To mitigate these risks, businesses often convert crypto payments into fiat currency immediately upon receipt. Additionally, some businesses may choose to adjust prices based on the current cryptocurrency market conditions. Ultimately, businesses must carefully consider the risks and benefits of accepting crypto payments.
