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Should You Accept Bitcoin in Your Small Business?
If you watch or read the news fairly regularly, you've probably heard talk of something called "Bitcoin". Bitcoin is a cryptocurrency, which allows for payments between two parties without the need for a third party or banking institution to complete a transfer of funds. This means that digital exchanges carry no hidden fees from institutions or government agencies, and your money is available to you almost immediately after purchase. Many of the bigger corporations like Microsoft and Dell have made the switch to allow for Bitcoin payment, and here are a few reasons why you should be doing the same:
How It Could Benefit Your Business:
Bitcoin takes a fraction of the time to process a payment compared to banks and other third parties. With some institutions, it can take days, even weeks, to process payments leaving you with less cash-flow in your business. Bitcoin, using its blockchain technology, stores every transaction at the time of purchase using complex computer code making the processing part of payments much easier.
Bitcoin charges ZERO fees for processing transactions. Many banks and other institutions charge 2%-3% for every transaction along with processing fees. Bitcoin gets rid of all fees, but in case you are in desperate need of cash then you can elect to pay a 1% fee for instant deposits.
Bitcoin is a global currency and does not answer to any government agency or country. This means no foreign transaction fees, exchange rates, or issues with transferring currency. As long as both parties accept bitcoin then you are able to do business, which can greatly open up your market.
Bitcoin prevents payment disputes by labeling all payments as final. If your business frequently suffers from customers and credit card companies contacting you over a transaction than Bitcoin might be your saving grace. Every sale made with Bitcoin is treated as a cash transaction, which basically means once the payment has been made the money is yours.
Bitcoin can be viewed as an investment opportunity. The value of a single currency has climbed into the thousands. If you accept Bitcoin you can virtually stock up until the value is high again and then sell quickly. There is more risk involved in this tactic, but the reward can be even greater.
Possible Downsides to Accepting Bitcoin:
Most U.S. banks are insured with the government in case of a security breach. Bitcoin is not insured like your typical bank. Most banks insure all the money you have in your account at a time, but only up to $250,000 in Bitcoin will be insured at any time.
Bitcoin is still new to the market which is why some companies like 7-Eleven are hesitant to accept it, and you should be cautious too. Since it is not backed by any government or financial institution, if Bitcoin loses its value due to a security issue or inflation, you could lose your entire investment.
It is almost a requirement that if you accept Bitcoin that you will need an accountant or some type of adviser. Each sale must account for tax and any regulations in the market. Failure to meet government standards and regulations on tax forms can result in hefty fines and being charged with actual crimes.
Bitcoin can catch fire like it did only a few years ago making your business extremely profitable. While it is no easy venture, plenty of businesses are adding it to their payment systems to increase their revenue. Do not mistake other people's circumstances for your own, though. Each business is different and before you make the decision to implement it into your routine, you may want to make sure you can afford it and it will prove profitable for you.