When you research information on cryptocurrencies such as bitcoin, your search results are filled with stories of fraud, arrests, dark markets, and price volatility.
Should you allow someone to pay you in cryptocurrency?
The answer, surprisingly, is “yes.” After all, even the IRS now accepts payments in bitcoin. If the stodgy ol’ federal government is accepting cryptocurrency, maybe you should get with the times.
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The main reason to accept cryptocurrencies such as bitcoin is because there are zero bank or credit card transaction fees. Essentially, there’s no bothersome middleman to pay. The money can simply flow from one person’s digital wallet to the next.
Imagine never having to pay those pesky fees ever again. What could that do to your bottom line?
Cryptocurrency transactions also happen instantaneously. Even if you’re not a business owner, it would certainly be nice to receive your money ASAP, without hassling with a financial institution. I can’t believe it still takes banks three to five days to shuffle money from one account to another.
Since bitcoin and “altcoins” (alternative cryptocurrencies to the grandfather, bitcoin) have no traditional banking infrastructure, there’s no bureaucracy getting in between you and your money.
For peer-to-peer payments, it doesn't get simpler than this.
Using a cryptocurrency also easily expands your business to an international audience. Cryptocurrencies have no borders. You’re not running a business with U.S. dollars and accepting payment in British pounds. Bitcoin is worth the same whether you’re in the U.S. or the U.K. – or anywhere else on the planet. Transactions are seamless. When the planet eventually does move to one single currency, it may look very similar to bitcoin – or it may actually be bitcoin.
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So how exactly does a business accept bitcoin as a payment type?
There are many, many bitcoin point-of-sale solutions available for merchants. CoinKite is a versatile technology for accepting Bitcoin. It offers a physical bitcoin payment terminal which looks exactly like the over-the-counter chip-and-PIN terminals that are used in many stores today. Shoppers who use CoinKite have a bitcoin debit card. Shoppers simply insert their card, enter their PIN, and they are done. These portals serve as ATMs as well.
The most popular form of transaction with bitcoin for merchants is to use point-of-sale apps. Customers can pay by displaying a QR code with the transaction information. If you’re selling something that costs $100, you will get $100-worth of bitcoin. You can exchange it to any other form of currency at your discretion.
Are you worried about payment fraud or identity theft? Cryptocurrencies carry no risk of either. That’s because no one enters any sensitive financial data that can be used again by someone else. One and done. Every other payment type – besides cash – leaves the door open for someone to glean sensitive information. And now you can understand why criminals use bitcoin like they used to use cash!
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Should you allow someone to pay in cryptocurrency? Yes. Make paying easy and safe for them. But convert it to a stable currency to avoid unnecessary risks.
Take the money you saved on transaction fees and consider that a good enough return (usually about three percent).
Don’t be tempted to “invest” the profits of your business in cryptocurrency.
The value of bitcoin and other cryptocurrencies can fluctuate wildly. To level off this risk, at any time, you should hold only a small percentage of your earnings in cryptocurrency, and regularly convert most of it into a stable currency. There are many services available to easily convert cryptocurrencies to any traditional currencies. Some financial institutions will even let you do it for free.
Having said that, I must also point out that bitcoin has historically risen in price. So you may do well to keep bitcoin payments as a form of investment. But bitcoin is so new that there is really no telling how it will behave in the future. It’s not as easy as calling heads or tails.
