As the cryptocurrency has started gaining wider acceptance, a lot more businesses have been working on ways to incorporate it as a payment method. There are a lot of big brands that accept Bitcoin now, like Hotels.com, Expedia, Zynga and many more. If you want a complete list, check out the infographic below.
There is no question that accepting the coin does have its advantages, but is it right for every business? We will examine that in this post.
The Advantages Of Accepting The Currency
- Potential access to a new client base.
- Shows clients that the business is forward thinking.
- Transaction fees are not bad.
- No long waiting periods for the bank to clear money to your account.
- There is the potential for the value to increase.
- No fraud chargebacks because transactions cannot be reversed.
The Disadvantages Of Accepting the Currency
- The currency is volatile. It could go up or down in value at any time. And, to be frank, the bottom could drop out of the market. You could lose everything, so this is not the ideal situation for a timid investor.
- To ride out fluctuations, you would need to be willing to leave the coins in place, and this could have a serious impact on your cash flow.
- Bitcoin is not the easiest method of payment for clients.
- You also have to factor in the cost of swapping the coins for fiat currency if you are withdrawing them, rather than paying them on to someone else.
Is It Worth It Or Not?
That is something that every business owner needs to decide for herself. It would be worthwhile to do some market research before making a decision about whether or not to accept payments in this manner.
Is this payment method something that your target market would respond to
Do they feel the need for it? Are your competitors offering this option or not?
If it is something that has the serious potential of attracting a lot of business for you, it might be worth considering.
The next thing to consider is what the effect would be on your cash flow. How would you manage if there was a downturn in the market? Can you adjust your pricing schedule to accommodate the risk of this happening?
No business can afford to lose money, but there are instances when this is especially true. The smaller your profit margin, the less wiggle room you have. In these cases, unless the move will give you a serious competitive advantage, it probably doesn’t make sense.
Can You Reduce The Risk?
There are ways to get the best of both worlds. You could, for example, put a limit on the transaction amount when it comes to accepting Bitcoin. You could, for example, allow people to purchase only under a certain amount.
Alternatively, you could offer this payment method with only some of your products. This is what Expedia does – you can only book accommodation using cryptocurrency, not flights, cars, etc.
Overall, the best move is to do as much research ahead of time as possible. Making an informed decision is your best bet here.