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Businesses face a lot of fees and fraud stressors that make it challenging sometimes to stay in the black on the bottom line. Many times, businesses are forced to raise prices in order to cover the costs associated with taking payments.
If you think about it, invoicing through services like PayPal or Square charges a hefty fee. Utilizing card transaction servicers charges a fee. Banks charge you a fee for business services of all kinds. Everything has a fee associated with it and those fees can really add up.
But what about cryptocurrency? This terminology is still an unknown option. Many are afraid to start using it simply because they aren’t familiar with the details or how cryptocurrency really works.
We’ve got your covered! We’ve put together a quick guide to share with you the 7 benefits of using cryptocurrency for services.
Cryptocurrency Explained
Before we get started, we thought it might be helpful to provide a basic explanation of cryptocurrency. You might already be familiar but hopefully, this will provide some clarification to ease your mind.
Cryptocurrency is a digital currency. There are no physical items or even a debit card to exchange for the services. The currency is controlled through a digital ledger database that stores all records in a secure format.
You can consider the processing and storage of cryptocurrency similarly to online banking. The primary difference is everything is digital with no ATM or cash withdrawal. These digital coins can be digitally transferred between two users.
One of the most commonly known cryptocurrencies is the bitcoin but now there are several other “brands” as well. Bitcoin was released in 2009 and was the first currency of its kind. Now, there are more than 6,000 variations of bitcoin and cryptocurrencies on the market.
Here are a few others you might recognize.
- Bitcoin
- Litecoin
- Bitcoin cash
- Ripple
- Ethereum
- NEO
- Stellar
- Iota
- Cardano
These are just a few of the most common cryptocurrencies you might stumble across.
Did you know that there are somewhere around 18.5 million bitcoin tokens circulating? This is near the cap limit as of 2019, when the capped limit was 21 million.
Now, you should understand the concept behind cryptocurrencies. So why use them? What benefit might they have for services and businesses alike? Here are our 7 benefits for you.
1. Transaction Fees
In a perfect world, we wouldn’t have to pay fees to simply be paid for our own transaction. But this isn’t a perfect world, which pretty means no matter which manner our customers choose to pay us in, we’re stuck paying high fees in the end.
Credit card transaction fees are astronomically high. You also pay fees on your website for credit card transactions. PayPal, Venmo, Square, and all of those services also charge fees for business or service transactions. Some of these transaction fees can run as high as 5% per transaction.
The fees do vary greatly depending on the company charging the fee. With cryptocurrency, the transaction doesn’t go through a processor like credit card transactions do so the fee is greatly reduced.
There is no confusion or cost to having a clear audit trail or paperwork trail and the transaction is clear between the two involved parties. With cryptocurrency transactions, your transaction fees are going to be about 1% or possibly even 0%.
This means using cryptocurrency for services can save you a significant amount of money over time. Although there may be fees involved when converting cryptocurrency into fiat currency using an exchange.
2. No Disputes or Chargebacks
Don’t you just hate it when you have a transaction that is then disputed or returned by the bank? Whether it’s because of fraud or because the purchaser was simply irresponsible, these things happen a lot with credit card transactions as well as checks (do those even still exist?).
A transaction for service that is paid for using cryptocurrency is a final transaction. These exchanges hold reduced fraud and there is no way for a client to contest the charge, which means you won’t have chargebacks that reduce your profit margin.
A transaction will never occur if the funds are not there. This is controlled by a comprehensive technology that simply won’t approve the transaction if it is not covered. This means no returned charges or denied charges that you find out about after the fact.
Funds are transmitted immediately through cryptocurrency and will not be taken back after the fact.
3. Data Security
You hear about hackers and breaches all the time. No web-based software is safe anymore. Banks and credit card companies, even credit reporting companies have been victims of fraud. Then there are times where you make a transaction and the receiving party or even a third-party (like a bank) gets access to everything there is to know about you.
This doesn’t happen with cryptocurrency. You can share only the information you want to share about yourself in the transaction. Every transaction is 100% unique and no other information is provided. There is no pre-authorization process or anything like that.
There is a far reduced likelihood of identity theft and fraud. Your data and your transactions are safe and secure. You have your privacy intact. This is particularly helpful for small businesses, who are often the target of hackers and scammers.
This might actually save you some business for users who are concerned about security or simply want to keep their personal information private.
In fact, many people have begun to use cryptocurrency as a means to gamble without the ability to be tracked. This is primarily true of online casinos, where you can remain anonymous using digital currency in the form of cryptocurrency. There is nothing to stop you from having any form of legal ramification when you anonymously gamble in online casinos with cryptocurrency means.
4. International Availability
You know that awful currency exchange rate that gets you every time? Not to worry! Cryptocurrency transactions can take place on a global level. This means your business can expand to the international market, provided you can substantiate this demand.
Cryptocurrency is decentralized. It’s not controlled by a government regulation. It just is. The value is what the value is and there are no fees or exchange rates to contend with. You can accept cryptocurrency rather than dealing with establishing a foundation of multiple national currencies and all that entails.
You don’t have to determine just which foreign currencies to use. You don’t have to figure out a tracking process. You don’t have to worry about the exchange rate changing drastically, and you don’t have to worry about any complications specifically related to doing business with foreign currencies involved.
5. Instant Gratification
You don’t have to wait while the bank or credit card company holds your funds hostage from a transaction. With some of these companies, it can take 2-3 days before they release the funds from payments directly to you. There are some processors that you might not see funds for several weeks from.
This is not true of cryptocurrency. When you have transactions completed through cryptocurrency processes, they are instantaneous. There is no holding of funds, there is no waiting period.
The transfer happens instantly, which means as soon as the transaction is complete, the cryptocurrency is in your possession and there is no waiting or processing period.
You pay credit card companies high fees for them to hold your money for days at a time. Just doesn’t seem right, does it?
6. New Client Attraction
There are clients everywhere who are looking for businesses that accept cryptocurrency transactions. Some clients have come to prefer this method of payment because they don’t have to balance a checkbook or worry about transactions that may take several days to show up. This causes them to inadvertently spend the money they forgot they already spent.
The instant gratification works for both businesses and clients. There is no more trying to keep track of a balance and what you spent or what isn’t showing yet.
Using cryptocurrency to receive payment for business services could be a valuable tool that will bring in new customers. You will be a step ahead of the competition and that will be attractive to people from the outside. Want an expanded client base? Check out cryptocurrency and see how it can help you expand.
7. It’s Simple!
Believe it or not, setting a business up to receive cryptocurrency payments is incredibly simple. It also doesn’t cost a lot of extra money like other new infrastructure might. There are a multitude of apps available that allow the processing of cryptocurrency.
Take a quick look at your options for using cryptocurrency for your business and you might just be surprised at how painless and affordable the process is.
There are some things to watch out for, like legal and tax implications of working with cryptocurrency. The good news is you have the resources and you have a secure paper trail for anything that takes place.
Conclusion
Cryptocurrency is still fairly new, even though it made its debut more than a decade ago. People are just starting to become comfortable with this payment form and businesses are just starting to look into their options for accepting this form of payment.
There are still some risks and things to be aware of but the benefits of using cryptocurrency for business services are pretty vast. You can save money and step into an advanced technological age, which in turn just might positively impact your business.
