In 2017, Bitcoin was able to shoot up from $1,000 all the way to its all-time high of near $20K. Since then, everyone knew about cryptocurrencies. Though Bitcoin had a correction and the price plummeted by more than 80%, people are now taking cryptocurrencies seriously. Regulators are now looking closely at laws that could apply to the industry while there are institutional investors that are now ready to invest in cryptos.
Bitcoin started in 2009 as a response to the 2008 financial crisis. The reason behind Satoshi Nakamoto’s Bitcoin is a currency that isn’t going to be affected by different economies. However, despite the development in the crypto industry, mass adoption remains to be seen.
Still, there are an increasing number of businesses that are now accepting cryptocurrencies, ranging from the retail industry to the gambling sector.
Now, why go for payment processors that allow crypto acceptance?
A Universal Currency
Cryptocurrencies are used not only as a volatile investment. Today, it can potentially be used as an alternative to currencies. Could you imagine if businesses start accepting cryptocurrencies? It means that you don’t have to incur losses whenever you travel to another country when exchanging for their local currency. Instead, you can make use of a cryptocurrency for your purchases.
In fact, there is a campaign to have a standard cryptocurrency in the coming 2020 Tokyo Olympics. This could potentially prevent long lines on money exchanges.
The problem is that there are relatively few businesses accepting cryptocurrencies from their actual stores. The good news though is that there are online stores that are now using payment processors that enable them to accept cryptocurrencies.
Transaction cost is among the reasons why the current system is a bit of a hassle on the part of consumers. Accepting payments via credit cards can be expensive on the part of businesses. Banks and payment processors will have roughly around 3-5% as their cut. Ultimately, you take this into account, businesses will still let the consumers handle this additional cost.
For Bitcoin, for instance, the transaction cost is less than one percent. And also, you have the fact that the transactions are irreversible which means that there are no chargebacks which are considered a common problem when it comes to credit card payments.
For businesses such as online casinos, they’re able to retain customers by offering them back some of their losses, which is only possible due to these lower transaction costs. Websites such as BestOnlineCasinoSites.com are one of the many that are following the growing popularity of crypto payment processors among online gambling platforms closely and is a good place to find casinos that accept Bitcoin.
Payment Processors Accepting Cryptocurrencies
Bitpay is the most popular method that can allow businesses to process cryptocurrencies as payment to goods and services. Bitpay allows merchants to process Bitcoin and Bitcoin Cash among other popular cryptocurrencies.
One advantage is that it is fast and simple. It means that you will have minimal risk when it comes to the volatility of the crypto market. What Bitpay does is convert the crypto payment directly into fiat. According to their statistics, they’ve already processed over $1 billion in payments just last year.
Now, the refund isn’t a problem as well. An email address will suffice to return the payment to the right customer.
Coinbase Commerce is yet another option if you want your business to be able to transact using cryptocurrencies. The good thing about this is that it is a known crypto exchange. It instantly converts the cryptocurrency into fiat too just like Bitpay. It means that you get to minimize the risk of price volatility.
Coinbase is quite popular in the market these days since there have already been 48,000 businesses that integrated their BTC payment solution.
Now, if you are into simplified plugin installations, then you can also check Gocoin. Gocoin supports a number of cryptocurrencies. And because it is easy to install on a business website, it has become popular among merchants.
Access to a New Market
One of the reasons why businesses start taking cryptocurrencies as payment is because they are looking to get their hands on a new market. For instance, there are countries that don’t have PayPal such as Pakistan. Accepting cryptocurrencies could potentially capture this market segment for them. In addition to this, it can also shape public opinion when it comes to their company since it might make their business look tech savvy.
Challenges to Accepting Cryptos
Of course, there are some challenges that businesses have to deal with. For instance, though you can minimize the risk by having a payment processor that automatically converts the cryptocurrency payment to fiat, cryptocurrencies are still volatile. It means that it can also affect how people purchase given that a cryptocurrency’s price can go up or down in an instant.
Another challenge that has to be addressed is the lack of regulatory clarity in the industry. The sooner that lawmakers figure out how to address cryptocurrencies, the better it is for businesses. It is important for a business to know whether or not there will be implications especially when it comes to existing tax laws. And for this reason, it is imperative for the businesses to ensure that they stay compliant especially to local laws if they decided to accept cryptocurrencies.
Also, you need to address the fact that the transaction fees can change. Bitcoin has increased its transaction fees in 2017 when there was a bull market. The average cost of Bitcoin transaction fees in December 2017 was actually over $50. The good news though is that it is now less than $1.
However, it remains impractical if you are going to buy a small item. For this reason, there are businesses that accept other altcoins such as Litecoin. The vision of Charlie Lee, the founder of Litecoin, is to have Litecoin as the go-to cryptocurrency for buying a small item. He believes that Bitcoin will eventually become gold while Litecoin can be used for small transactions.
Though it might take time before it becomes a norm for businesses to start accepting cryptocurrencies, the future is bright for the industry. There is a chance that we are going to see more businesses accepting popular cryptocurrencies not only Bitcoin but also Litecoin, Ethereum, and other popular cryptocurrencies.