The Pros and Cons of Accepting Cryptocurrency as Payment
To find out whether your business needs to accept crypto payments, weigh the pros and cons.
They refer mainly to the technical capabilities of crypto, which have overtaken the capabilities of banks.
Facilitation of trade with other countries
For international payments such as SWIFT, a person should pay, as a rule, at least $12 plus a percentage of the transfer amount. Crypto works outside the banking system, so it allows you to avoid excess payments.
Payment processors, such as PayPal, charge sellers (in this case, the standard rate is 4%). The fee for transferring cryptocurrency is usually lower: on some exchanges, it is not even higher than 1%.
Higher transaction speed
Crypto allows conditionally instant transfers. Bitcoin, for example, can occasionally “delay on the road” due to the peculiarities of blockchain operation. However, in general, you can receive a transfer within 1 to 60 minutes.
They are mainly associated with a certain instability of crypto.
The rate of Ethereum, the second most popular cryptocurrency, fell from $2,900 to $1,200 in May-July 2022. The same with Bitcoin: its value was almost $43,000 in April and about $17,000 in December. The buyer may be upset if the next day, the purchase becomes much cheaper against the dollar. At the same time, the drop in price can be pleasing.
Difficulties with paying taxes
Crypto is taxable. The entrepreneur must track and fix its rate on the day of receipt or sale. This makes the job a bit more complicated, but there are systems that automate it.
Irreversibility of the transaction
On the one hand, it protects against fraudsters who use the option to cancel the payment. On the other hand, it makes it difficult to refund a product or service.
The more payment methods you offer, the more convenient conditions for purchase you create. This increases customer loyalty. On the other hand, crypto is not suitable for every business. Thus, it is unlikely that you will be able to set up a monthly subscription or installments using crypto.