With the constant popularity growth enjoyed by cryptocurrencies, small businesses from all around the world think about accepting crypto payments. But, is this a good idea?
Just like every single business decision you will make, there are both advantages and disadvantages of accepting cryptocurrency payments. Analyze them both when you make your final decision.
Advantages Of Accepting Cryptocurrency Payments
The main advantages you need to consider are the following:
Solving The Slow Cross-Border Payment Problem
When you accept international payments, not many options are available, with most of them being quite small. A bank payment can end up taking days and checks are quite inefficient. You cannot offer Paypal payments for all countries.
With cryptocurrencies, including the alt coins you see Cryptoext talk about, you receive payments directly without the involvement of a third party. This means payments can reach your account in just minutes.
Not Having To Deal With Chargebacks
As a small business, you always have to think about chargebacks. With cryptocurrencies, this is not something you have to worry about. Payments cannot be returned to customers by third parties.
Low Transaction Fees
PayPal fees can end up going over four percent. And even higher fees appear with other payment options, including both percentages and flat fees charged per transactions. With crypto payments, fees are simply much more accepting, usually at or under one percent.
Monetary Diversification
Experienced financial experts always tell you that you have to diversify your assets. This is a philosophy used by most investors today. Basically, this meant that you have to hold different national currencies so that you could avoid having to deal with constant foreign currency exchanges.
With the use of cryptocurrencies, you can easily increase your monetary diversification. And you might even end up making a good investment without even wanting to, as crypto coins tend to go up.
Disadvantages Of Accepting Cryptocurrency Payments
Although the advantages mentioned above are very important, you need to also think about the main disadvantages highlighted below:
High Market Volatility
Cryptocurrencies are not regulated. Right now, it is the market that dictates cryptocurrency prices. This can easily lead to huge volatility. When crypto value goes down before you exchange your coins, you end up receiving less fiat currency than you wanted. This can lead to money being lost on the sale.
Security Problems
If you follow recent crypto news, you surely heard about millions of dollars being lost in crypto hacks. It is true that holding crypto is generally secure, but you have to be cautious.
Public Transactions
All transactions made with cryptocurrencies are public. Transparency is thus guaranteed on the network and is generally seen as a huge advantage. However, for small businesses, this is a problem, since it can lead to wallet addresses being hacked or leaked, which are huge security concerns.
You Cannot Recover Wallet Addresses
When you lose access to the wallet, there is nothing you can do. This can lead to you losing all your crypto funds, which would often lead to instant bankruptcy.
Author: Boris Dzhingarov is digital nomad travelling the world. He is the CEO of ESBO ltd.
