The rise in digital wallets means that payments and transactions are becoming more convenient and, as a result, are changing how businesses set up their ecommerce offerings. One of the biggest disruptors in this landscape is cryptocurrency.
Cryptocurrency is an instant payment system and, as it is automatically converted into the local currency, accepting this form of payment seems like an easy and straightforward payment method for international business and ecommerce stores. However, there are still plenty of controversies surrounding the acceptance and general use of cryptocurrencies.
If you are an ecommerce retailer selling goods online, then using cryptocurrency as a payment method can enhance your customers’ journey, whilst also expanding your customer base. So, should you consider adding cryptocurrency as a payment method to your website? Let’s take a closer look.
Cryptocurrency is a digital currency which is not controlled by any government or bank and, on the whole, is largely unregulated. Cryptocurrency uses encryption techniques which regulate its use and release. Each cryptocurrency transaction that occurs is verified by users on a network - also known as a blockchain - and these transactions then become public records in order to prevent the currency from being spent by the same user, multiple times. When it comes to using cryptocurrency, the key is understanding that each coin, therefore transaction, is unique, whilst some coins offer more protection than others.
Pay Lower Fees
All ecommerce merchants are responsible for paying transaction fees on each order made, as well as initial setup fees for payment processors. For example, PayPal charges around 4% per transaction, although this can sometimes be more. Cryptocurrencies charge no to low fees and, if you ship internationally, then using cryptocurrencies can help to avoid further international currency fees. The reason for this is that cryptocurrencies aren’t tied to an origin or bank, which can be held to account. As a result, businesses don’t need to wait for payments to clear, as cryptocurrency payments are instantaneous.
Stay Ahead Of Your Competition
More and more businesses are choosing to accept cryptocurrencies, such as bitcoin, and some of the world’s biggest businesses such as Starbucks, Microsoft and Etsy accept it as a form of payment. However, smaller businesses are more reluctant to accept it as a payment method which, as a result, can lead you to get ahead of your competition if you do decide to offer it as a payment option.
Easy To Integrate Onto Your Website
Another benefit to accepting bitcoin as a payment method is the time it takes to add it to your website - in that it takes no time at all. You can integrate a payment option for cryptocurrencies within minutes which, unlike other payment methods such as Klarna, Apple Pay or PayPal that can involve paperwork and approval time, can be up and running on your website in no time.
Whilst there are many advantages to accepting cryptocurrency as a payment method on your website, there are also some disadvantages to it, too. The cryptocurrency market is extremely volatile and, as it is largely unregulated, means that it is open to both great highs and sudden lows. As well as this, the market is saturated with scams and fraudsters, due to the fact that it is unregulated, and unfortunately, a large number of customers fall victim to broker scams and lose money through trades.
Although there are fewer fees included with accepting cryptocurrency as a payment method, depending on where you operate or sell products too, you may be subject to tax implications, particularly in the US. This means that if you accept crypto as a currency or payment method, then you need to report it as a gross income, based on the market value when it was received. Essentially, each time you buy, sell or use cryptocurrency, then you’re subjected to gains tax.
If you want to keep your business on the cutting edge and a mile ahead of your competitors, then it is definitely worth considering accepting cryptocurrency as a form of payment for your online ecommerce store. As with everything, there are positives, as well as downsides, to using cryptocurrency as a payment method, but it is completely dependent on your business plan and individual goals.
