The most successful businesses are the ones who are willing to adapt. The world is changing at an exponential rate. New forms of technology are breaking ground every single day, and consumer trends and behaviors are constantly in flux. Companies who stick stubbornly by their methods and refuse to change their ways will be stuck in the past and their competitors will leave them trailing behind.
It’s not always easy to tell which phenomena are here to stay, and which are merely passing trends that will soon disappear in a cloud of smoke. A decade ago, many people looked scornfully at the idea of cryptocurrency and ever expected it to be taken seriously by the general public.
Yet in 2021, El Salvador made history by becoming the first country ever to adopt a form of cryptocurrency – Bitcoin – as its official legal tender.
While it’s still unclear whether it will truly replace traditional money, It’s clear that cryptocurrency is here for good. And as a forward-thinking business owner, you need to be considering its effect on your business. More and more consumers are using digital currencies like Bitcoin to pay for goods and services, yet only a handful of businesses currently accept it as payment.
It’s understandable that you may be skeptical about opening a crypto bank account for your business.. After all, very few people truly understand it, and it is only a relatively recent phenomenon.
Surely it’s far safer to stick to what you know. But this mindset could be what’s holding you back from your true potential, and therefore it’s worthwhile considering the benefits and drawbacks of such a decision.
To help you make up your mind, here are the pros and cons of accepting cryptocurrency as payment.
Better payment security: Credit and debit cards are incredibly susceptible to fraud, and the global pandemic has seen a huge rise in attempted fraudulent transactions, of which small businesses are often the target. Cryptocurrency, on the other hand, is considered a lot more secure as it does not require third-party verification and so customer data is not stored in a centralised hub.
Lower fees: Merchants are responsible for paying fees when it comes to credit and debit card transactions. The same is true for cryptocurrency, but these fees are generally much lower. While Paypal charges around 4% per transaction for example, Bitcoin charges less than 1%.
Faster payment: Cryptocurrency transactions take place in seconds or minutes, rather than days. It’s one of the most efficient and effective ways for people to make payments.
Higher risk: Cryptocurrency is more volatile than other forms of currency, meaning your profits could go up one day and plummet the next due to fluctuations in price. It is often a lot safer to stick with traditional money. Also, because it is so new, it is understandable that you might have trust issues.
Tax implications: Currently, cryptocurrency is perceived in tax terms as property, meaning businesses have to report it as gross income, and thereby pay capital gains tax. The tax rules also mean you must keep track of the current value of crypto on the day of the transaction, which can become very complicated when keeping records. Fortunately, crypto tax software is there to ease up the process.
