Should Your Business Accept Cryptocurrency?
Accepting cryptocurrency at a business has become easier over the last decade, but it is still more complicated than acquiring it as an individual. The checklist to get you started includes finding a payments partner, working through integration questions and thinking about your cash-conversion strategy.
Who Accepts Bitcoin and Crypto?
The first businesses to start accepting crypto payments were in the tech industry. Companies like Microsoft and PayPal have been accepting it for some time. Shopping website Overstock took adoption one step further, funding new blockchain projects as well as allowing customers to buy from them using Bitcoin. In recent years, companies away from the tech industry have started to get involved, including Home Depot and Whole Foods.
Large companies like these can make headlines if they start to accept crypto, but thousands of small businesses around the world also take payments. There’s more than just Bitcoin too. To learn more about other cryptocurrencies, you can use Swyftx Learn Ethereum.
Why Accept Crypto Payments
Quicker, cheaper payments can be an appealing proposition for an existing business. Crypto payments could also unlock some new business models, similar to how the rise of card payments enabled the growth of online shopping.
What tends to happen is that once you bring down the cost of access, you can see some new and interesting businesses that you haven’t seen before.
What To Consider Before Accepting Bitcoin and Crypto
Go it alone or use a payments tool?
Peer-to-peer transactions are an integral part of cryptocurrencies. In other words, you don’t need a third-party processor. This is the cheapest route to go down. Bitcoin, for example, is free to receive and can be free to send.
However, building a payment workflow will be a time-consuming job that demands some expertise. Third-party payment tools address this need by giving a business a way to start accepting crypto payments very quickly. To use one, you will probably need to submit information about your business in an application, and more information might be needed if you plan to convert crypto to cash through the service provider.
These services are not a replacement for a payment processor, as they do not process card payments. If you want to accept both cards and cryptocurrency, you will need both.
Which cryptocurrencies will you accept?
There are thousands of cryptocurrencies out there, but not every one is accepted on every service. The most popular is Bitcoin, which is supported pretty much everywhere. If you are interested in accepting something else, like Alice or Mooncoin, you might need to look a little harder.
What are the tax and accounting issues?
It is a good idea to talk to your bookkeeper or accountant if you are thinking about accepting crypto?
You should be aware of the tax implications, especially if you are going to hold onto any crypto that you receive.
Think through how information from your point-of-sale system gets to your accountant. For example, if you use a cloud-based system like QuickBooks, you will want to know if your crypto payment tool integrates with it.
Converting to cash
Converting to cash can have huge implications for your business, as a big price swing means the value of your crypto could rise or fall in a short amount of time. Will you hold onto whatever crypto you receive indefinitely? Will you convert it into cash immediately? Will you convert it to cash on a scheduled basis?
If you rely on consistent cash flow for your operations, these questions are even more important to answer. Once you have a plan in place, make sure your preferred crypto payments service can actually implement it.
The services that are provided by crypto payments companies can help to smooth out issues with implementation, like monitoring price volatility and setting up a modern user interface. However, a company will have some operational questions to figure out before they can get started.
When you accept crypto, there is no direct cost to you, but you will incur costs to do things like reformat reports, train customer service, handle returns, and manage disputes. Time is a limited resource too. Everything that you do means that something else waits.
Operational questions that you might want to consider include:
– What training will staff need?
– Will you be prepared to answer customer questions?
– Are there elements of customer service, like issuing refunds, that need to be rethought?
– How will your crypto payments tool work with your current inventory or reporting practices?
Websites by Masterhouse
Masterhouse Media is an innovative digital consulting agency from Vancouver, BC specializing in web development and mobile apps. Masterhouse is best known for launching the popular Internet portal Clubvibes.com in 1999, one of the first social media platforms on the Internet. The company is currently focused on building digital strategies and premium websites for clients. Find out more at masterhouse.net