With crypto’s rapid rise over the past few years, many businesses are now looking into ways to accept crypto payments from their customers.
While typically this would have been logistically difficult for many small businesses, technological advancements and the rise of crypto into the mainstream means that it’s now more possible than ever, with a variety of methods available.
So, is accepting crypto payments right for your business, and how do you go about accepting crypto payments?
Pros of accepting crypto payments
Attract business: Many crypto enthusiasts specifically seek out businesses where they can spend their crypto funds, especially since spending crypto can often be logistically hard. By offering crypto payments, you can open your business up to new customers, who will often stay loyal to your brand in the future.
Access to international markets: If you have an online store, crypto can really help your business penetrate into foreign markets. Since crypto payments charge no international payment fees, international crypto users could be more likely to buy from your business, especially when current international transactions are so expensive.
Faster payments: Crypto payments are normally settled within minutes or hours, compared to more traditional payments which can take days to settle. With crypto payments, you will receive your hard-earned money faster, which is important for many small businesses and their cash flow.
Lower processing fees: If you complete transactions directly with your customers, using a direct transfer from their wallet to yours, transaction fees could be as low as 0%. Using a crypto payment platform, fees will normally be about 1% of the transaction. This is significantly lower than rates of over 3% charged by large transaction companies such as Visa and Mastercard.
Cons of accepting crypto payments
High volatility: The money you make can quickly change in value if you hold it in crypto. While the value could increase in value, it could also go down. Some crypto payment platforms will allow you to receive the transaction in fiat currency.
Expensive and time-consuming to introduce: Introducing the infrastructure and processes to process crypto can often be costly for smaller businesses, as well as time-consuming, if it is not outsourced.
Keeping up with regulation and tax: Crypto is a rapidly changing asset. Accepting crypto payments and holding crypto, especially as a business, requires complete understanding of the law and taxes, as well as awareness of how the legal landscape could change over time.
How to accept crypto payments
According to a HSB nationwide survey conducted in January 2020, 36% of small businesses accept cryptocurrency payments. This statistic shows that, despite some hurdles presented in introducing crypto payments, it is possible for small businesses to do so. And this could make your business much more competitive and profitable.
The most common method for accepting crypto payments is with a crypto payments platform, such as BitPay or Coinbase. These platforms organize most of the logistical necessities for you, though they will charge fees.
Crypto payment platforms can be an easy and stress-free method to accepting crypto, without breaking the bank. These platforms offer payments in many types of crypto, have strong security features, and can exchange your received crypto straight into fiat currency.
An alternate method for online-only businesses is to use an online plug-in, which often work well in accordance with websites such as Woocommerce. You will need to set up a crypto wallet first, so that you can receive crypto payments. Linking this wallet to the plug-in will allow users to pay on crypto online, where the funds will then enter your wallet.
Small businesses which don’t want to pay for third-party applications may also consider direct payments. By sharing your wallet address or QR code, customers can send money for transactions directly to your wallet. This avoids the small processing fees associated with third parties, but can also be less secure and result in more work on your part, as you will need to track these payments and convert them into fiat currency yourself.
It is recommended that small businesses exchange their crypto payments into fiat currency as soon as possible, unless crypto is especially strong or in a period of climbing. Due to crypto’s volatility, currency received from crypto payments can quickly change in value. Also ensure that you are always aware of the tax status of crypto payments in the territory or state your business is based.
Crypto payments with Chainswipe
With Chainswipe, we offer clients the chance to launch their own white labeled crypto debit cards, as well as a variety of bundled Web3 features and processes. The crypto debit card can be used at any merchant that accepts debit cards.
And with our no-code components and expertise, we offer these services with little effort, time, or stress required from you, making crypto and payment infrastructure accessible to businesses of all sizes.
Contact us to learn more today.