Should You Accept Cryptocurrency as Payment on Your eCommerce Store?
You may have heard of Bitcoin and other cryptocurrencies, but should eCommerce store owners begin accepting cryptocurrency as payment? Cryptocurrencies have quickly become a popular topic in recent years. Many people are beginning to see their value and accept them as payment for their eCommerce stores. Cryptocurrency transactions have several benefits to both buyers and sellers, including a broader market, lower fees, and higher security. However, it’s important to consider the long-term risks before taking on this new payment option.
Why consider accepting cryptocurrency payments?
In recent years, the use of cryptocurrencies such as Bitcoin, Ethereum, and Litecoin have become more common. Cryptocurrency gives users a new way of transacting and storing funds, independent of banks and other financial institutions.
- Consumer adoption is on the rise. You don’t want to be late to the party.
- It’s fast. Cryptocurrencies are faster and easier to transfer than wired transactions. In fact, they allow for near-instantaneous transactions with minimal paperwork and effort.
- It opens up your market to even more potential customers.
Advantages of Accepting Cryptocurrency
A broader market
Because it’s still relatively early to accept cryptocurrency in eCommerce stores, doing so may attract a new worldwide demographic. This demographic includes tech-savvy and forward-thinking consumers who are eager to be on the cutting edge.
The option to pay through a digital wallet, transaction or credit card platform can allow you to use and view broader markets worldwide.
Lower transaction fees and anonymity
Another benefit of offering cryptocurrency as a payment method is the low fees for each transaction. Fees can vary depending on whether you accept cryptocurrency to your wallet or through a third-party provider like Coinbase. However, they are still generally less than credit card companies and payment apps like Stripe or Square. Especially as these platforms typically charge transaction fees anywhere from 3-5% on each transaction.
Higher security: Reduce fraud and chargebacks
Cryptocurrencies provide an extra layer of security against fraud as the blockchain ledger cannot be tampered with. When you accept cryptocurrency, you give a more secure payment option than traditional credit card payments. As there is no middleman such as a bank, there is little to no chance of funds being withdrawn from your account without your explicit permission. Money exchanges between the buyer and seller almost immediately. It cannot be rescinded or forged, thus, drastically reducing the chances of fraudulent chargebacks or returns.
Disadvantages to Accepting Cryptocurrency
Can be volatile
In reality, cryptocurrency has a value that fluctuates just like any other currency. In fact, its value can change due to market forces such as supply and demand. However, fluctuations can appear more volatile. This leads to many people being hesitant to use it as a form of payment. Many people believe that because cryptocurrency is not regulated by a central bank it does not hold a stable value. Thus making it a risky form of payment and investment.
One very serious issue with cryptocurrency is the sustainability of its power needs. Even with some cryptocurrencies trending toward green technology, there are still demands for mining to remain profitable. Regulations are slowly being initiated but it is still a very important concern.
Accepting cryptocurrency as payment in your eCommerce store can be a viable and potentially rewarding choice for your business. When deciding which payment methods to accept, you should always weigh the potential risks and benefits, such as increased security and fewer fees, against any difficulties that come with accepting the currency. Doing the necessary research ahead of time will ensure you make the right decision for your business. So, will you be adding cryptocurrency as a payment option on your eCommerce store?